advisory committee on bankruptcy rules

ADVISORY COMMITTEEON

BANKRUPTCY RULES

Amelia Island, FLMarch 25-26, 2004

ADVISORY COMMITTEE ON BANKR LJPTCY RULESMeeting of March 25-26, 2004

Ritz-Carlton Hotel, Amelia Island, FL

Introductory Items

1. Approval of minutes of September 2003 meeting.

2. Report on the January 2004 meeting of the Comm-nittee on Rules of Practice andProcedure (Standing Committee). The Chairman and the Reporter will provide an oralreport.

3. Report on the January 2004 meeting of the Committee on the Administration of theBankruptcy System (Bankruptcy Committee). Judge Montali will provide an oral report.

Action Items

4. Comments received on the preliminary draft amendments to Rules 1007, 3004, 3005,4008, 7004, and 9006. Copies of the comments, which were distributed by mail onFebruary 24, 2004, are included. Five additional comments on the preliminary draftamendment to Civil Rule 6 also are included.

5. Report by the Technology Subcommittee concerning proposed amendments to Rule2002(g) (and possibly Rule 9001) to authorize sending notice to a creditor in chapter 7 orchapter 13 cases at a central address specified by the creditor, if the creditor requests thatmethod of notice. Information on the Bankruptcy Noticing Center's new NationalCreditor Registration Service is attached. Also included is the text of a similar provisionin the Bankruptcy Abuse Prevention and Consumer Protection Act of 2004, S. 1920, aspassed by the House of Representatives on January 28, 2004.

6. Recommendation by the Technology Subcommittee concerning the proposal by Mr.Waldron to amend Rule 9014 to permit electronic service in connection with contestedmatters with respect to parties who are already receiving electronic service in the case.

Recommendation by the Consumer Subcommittee concerning the request by the Directorof the Executive Office for United States Trustees to amend Rules 2003, 4002, 2116, and7001, and to create a new Official Form, Disclosure of Compensation of Attorney forDebtor. Also included is a copy of Director's Procedural Form 203, Disclosure ofCompensation of Attorney for Debtor.

8. Proposed Committee Note for the amendment to Schedule I of Official Form 6 approvedat the September 2003 meeting. A copy of the fitst five pages of the Statemett of

Financial affairs, Official Formn 7, which includes language almost identical to that usedin Schedule I, is attached.

9. Proposed amendment to Rule 3007(b) to clarify the procedure when an objection to aclaim is joined with a demand for relief of the kind specified in Rule 7001.

10. Proposed amendments to Rule 7023 or to Rule 7054 to correct a discrepancy with CivilRule 23 as amended effective December 1, 2003. Copies of the revised portions of Rule23 and of 28 U.S.C. § 2403, Intervention by United States or a State; ConstitutionalQuestion, are included.

it. Judge Mund's suggestion that the Committee propose a rule similar to proposed CivilRule 5.1. Copies of comments on the proposed civil rule are attached.

12. (a) Request by the bankruptcy CM/ECF Working group to revise Official Form 10,Proof of Claim, and create a new Director's Form, Notce of Transfer of Claim.

(b) Suggestion to revise the checkboxes on Official Form 10 for claims which replaceor amend a previously filed claim.

13. Proposed amendments to Official Forms 10, 16D, and 17 as a result of the bankruptcyprivacy amendments which took effect on December 1, 2003.

Information Items

14. Status of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2004, whichwas passed by the House of Representatives on January 28, 2004, by a vote of 265 - 99.

i45. Report concerning the restyling of Civil Rules and discussion of how the committeeshould proceed in light of the impact on the bankruptcy rules and the need, ultimately, toconform to bankruptcy rules to changes in the civil rules Professor Resnick, the chair ofthe Style Subcommittee, will provide an oral report. Copies of the draft restyling of CivilRules 16 - 22, 23.1 - 37, and 45 were distributed by email orn January 21, 2004.

i6. Report on the initial meeting of the subcommittee appointed by Judge David Levi, thechair of the Standing Committee, to review the E-Goverranent Act, Pub. L. 107-347, andpropose rules to implement its provisions. The Chairman will provide an oral report.Excerpts from the Act are attached.

1IT Amendments to Schedule E of Official Form 6 and Official F,,rnm 10 to incorporate theautomatic adjustment of the dollar amounts in section 507(a) of the Bankruptcy Code onApril 1, 2004, pursuant to II U.S.C. § 104(b). A memorandum or the adjustment isincluded.

18. Amendments to Director's Procedural Forms 132, 200, and 201 to reflect the privacyamendments and changes in the Bankruptcy Court Miscellaneous Fee Schedule.

J9. Proposed Director's Procedural Form B202., Statement of Military Service, for use bydebtors who may be eligible for relief under the Servicemembers' Civil Relief Act of2003, Pub. L. 108-189. A copy of an overview of the Act distributed to bankruptcyjudges on February 17, 2004, is attached.

20. Report on the Conference on Electronic Discovery sponsored by the Civil RulesCommittee on February 20-21, 2004, at Fordham University School of Law. Thethreshold issue for the Conference was whether amendments to the Civil Rules areneeded concerning electronic discovery matters. Judge McFeeley and Professor Resnickwill provide oral reports.

21. Reports on the Bankruptcy Committee's recommendation that the Advisory Committeework with the Bankruptcy Committee to develop rules regarding venue and on the megachapter 11 conference sponsored by the Federal Judicial Center. Judge Montali willprovide an oral report on the Bankruptcy Committee's recommendation. The report onthe venue conference was distributed by email on February 4, 2004. Additional copieswill be available at the meeting.

22. Report on the FJC survey of mandatory disclosure under Civil Rule 26. The report was tobe distributed separately. Additional copies will be available at the meeting.

23. Report on the implementation of the new bankruptcy privacy rules. Mr. Wannamakerwill provide an oral report. A memorandum from Judge John W. Lungstrum, the chair ofthe Committee on Court Administration and Case Management, on implementation ofJudicial Conference privacy policy in the bankruptcy courts is attached. Thememorandum includes a model notice of the electronic availability of case fileinformation and a model local rule on public access to electronic case files. Also attachedis a memorandum on inquiries about the implementation of the privacy amendments.

24. Report on the implementation of the CM/ECF system (case management/electronic casefiles) and electronic filing. Mr. Wannamaker will provide an oral report. A fact sheet onthe CM/ECF project is attached.

25. Copy of the Supreme Court decision in Kontrick v. Ryan, __ U.S. _- (2004) concerningthe time limitation in Rule 4004.

26. Report on the revision of the forms page on the judiciary's Internet website and on theJNET. Ms. Ketchum will provide an oral report.

27. Bull Pen: Amendment to Schedule G - Executory Contracts and Unexpired Leases. Theamendment was approved in October 2002 arnd is to be published for comment insummer 2004 and presented to the Judicial Conference in September 2005 to take effect

in December 2005 simultaneously with the amendment to Rule 1007 requiring the debtor

to file a mailing list with the names and addresses of all parties on Schedules D - H.

28. List and progress chart of proposed amendments.

29. Rules Docket

Administrative Matters

30. Next meeting reminder: September 9 - 10, 2004, the Ritz-Carlton, Half Moon Bay, CA

31. Discussion of date and location for spring 2005 meeting.

ADVISORY COMMITTEE ON BANKRUPTCY RULESMarch 2004

Chair:

Honorable A. Thomas Small Honorable Laura Taylor SwainUnited States Bankruptcy Judge United States District JudgeUnited States Bankruptcy Court United States District CourtPost Office Drawer 2747 Thurgood Marshall United StatesRaleigh, NC 27602 Courthouse, Room 1205

40 Foley SquareMembers: New York, NY 10007

Honorable R. Guy Cole, Jr. Honorable Richard A. SchellCircuit Judge United States District JudgeUnited States Court of Appeals United States District Court127 Joseph P. Kinneary United States Courthouse Annex

United States Courthouse Bank One Building85 Marconi Boulevard 200 North Travis StreetColumbus, OH 43215 Sherman, TX 75090

Honorable Ernest C. Torres Honorable James D. Walker, Jr.Chief Judge United States Bankruptcy JudgeUnited States District Court United States Bankruptcy CourtUnited States Courthouse 433 Cherry StreetOne Exchange Terrace Macon, GA 31201-7957Providence, RI 02903-1779

Honorable Christopher M. KleinHonorable Irene M. Keeley United States Bankruptcy JudgeChief Judge United States Bankruptcy CourtUnited States District Court 3-200 United States Courthouse500 West Pike Street, 2nd Floor 501 I StreetClarksburg, WV 26301 Sacramento, CA 95814-2322

Honorable Thomas S. Zilly Honorable Mark B. McFeeleyUnited States District Judge United States Bankruptcy JudgeUnited States District Court United States Bankruptcy Court410 United States Courthouse 421 Gold Street, S.W., 6th Floor1010 Fifth Avenue Albuquerque, NM 87102Seattle, WA 48104-1130

Professor Mary Jo WigginsUniversity of San DiegoSchool of Law5998 Alcala ParkSan Diego, CA 92110

March 8, 2004Projects

ADVISORY COMMITTEE ON BANKRUPTCY RULES (CONTD.)

Professor Alan N. Resnick Lawrence A. FriedmanHofstra University School of Law Director, Executive Office for121 Hofstra University United States TrusteesHempstead, NY 11549-1210 20 Massachusetts Avenue, N.W., Suite 8000

Washington, DC 20530Eric L. Frank, EsquireDiDonato & Winterhalter, P.C. Professor Bruce A. Markell1818 Market Street, Suite 3520 University of Nevada Las Vegas •Philadelphia, PA 19103 William S. Boyd School of Law

4505 Maryland Parkway, Box 451003Howard L. Adelman, Esquire Las Vegas, NV 89154-1003Adelman, Gettleman, Merens, Berish

& Carter, Ltd. Melissa B. Jacoby, Assistant ProfessorSuite 1050, 53 West Jackson Boulevard Temple UniversityChicago, IL 60604 James E. Beasley School of Law

1719 N. Broad StreetK. John Shaffer, Esquire Philadelphia, PA 19122Stutman, Treister & Glatt, P.C.1901 Avenue of the Stars, 12th Floor Patricia S. Ketchum, EsquireLos Angeles, CA 90067 1607 2 2nd Street, N.W.

Washington, DC 20008-1921Director, Commercial Litigation Branch,Civil Division, U.S. Dept. of Justice (ex officio) Liaison Member:J. Christopher Kohn, Esquire1100 L Street, N.W., 1 0 th Floor, Room 10036 Honorable Harris L HartzWashington, DC 20005 United States Circuit Judge

United States Court of AppealsReporter: 710 United States Courthouse

333 Lomas Boulevard, N.W.Professor Jeffrey W. Morris Albuquerque, NM 87102University of DaytonSchool of Law Liaison from Committee on the300 College Park Administration of the Bankruptcy System:Dayton, OH 45469-2772

Honorable Dennis MontaliAdvisors and Consultants: United States Bankruptcy Judge

United States Bankruptcy CourtJames J. Waldron 235 Pine StreetClerk, United States Bankruptcy Court San Francisco, CA 94104Martin Luther King, Jr. Federal Building

and United States CourthouseThird Floor, 50 Walnut StreetNewark, NJ 07102-3550


ADVISORY COMMITTEE ON BANKRUPTCY RULES (CONTD.)

Secretary:

Peter G. McCabeSecretary, Committee on Rules of

Practice and ProcedureWashington, DC 20544


ADVISORY COMMITTEE ON BANKRUPTCY RULES

SUBCOMMITTEES

Subcommittee on Attorney Conduct and Subcommittee on FormsHealth Care Judge James D. Walker, Jr., ChairJudge Ernest C. Torres, Chair Judge Christopher M. KleinJudge Richard A. Schell Professor Mary Jo WigginsJudge Mark B. MeFeeley Eric L. Frank, EsquireHoward L. Adelman, Esquire J. Christopher Kohn, EsquireK. John Shaffer, Esquire James J. Waldron, ex officio

Subcommittee on Business Issues Subcommittee on Privacy, Public Access,Professor Alan N. Resnick, Chair and AppealsJudge Thomas S. Zilly Howard-L. Adelman, Esquire, ChairJudge Christopher M. Klein Judge Ernest C. TorresK. John Shaffer, Esquire Judge James D. Walker, Jr.J. Christopher Kohn, Esquire K. John Shaffer, EsquireJames J. Waldron, ex officio

Subcommittee on StyleSubcommittee on Consumer Issues Professor Alan N. Resnick, ChairEric L. Frank, Esquire, Chair Judge Christopher M. KleinJudge Laura Taylor Swain Professor Mary Jo WigginsJudge James D. Walker, Jr.Professor Mary Jo Wiggins Subcommittee on Technology and CrossJames J. Waldron, ex officio Border Insolvency

Judge Thomas S. Zilly, ChairJudge Irene M. KeeleyJudge Laura Taylor SwainJudge Mark B. McFeeley


JUDICIAL CONFERENCE RULES COMMITTEES

Chairs Reporters

Honorable David F. Levi Prof. Daniel R. CoquilletteChief Judge, United States District Court Boston College Law SchoolUnited States Courthouse 885 Centre Street501 I Street, 14 th Floor Newton Centre, MA 02159Sacramento, CA 95814

Honorable Samuel A. Alito, Jr. Prof. Patrick J. SchiltzUnited States Circuit Judge University of St. Thomas357 United States Post Office School of Lawand Courthouse 1000 La Salle Avenue, MSL 400

50 Walnut Street Minneapolis, MN 55403-2015Newark, NJ 07101

Honorable A. Thomas Small Prof. Jeffrey W. MorrisUnited States Bankruptcy Judge University of DaytonUnited States Bankruptcy Court School of LawPost Office Drawer 2747 300 College ParkRaleigh, NC 27602 Dayton, OH 45469-2772

Honorable Lee H. Rosenthal Prof. Edward H. CooperUnited States District Judge University of MichiganUnited States District Court Law School11535 Bob Casey U.S. Courthouse 312 Hutchins Hall515 Rusk Avenue Ann Arbor, MI 48109-1215Houston, TX 77002-2698

Honorable Edward E. Carnes Prof. David A. SchlueterUnited States Circuit Judge St. Mary's UniversityUnited States Court of Appeals School of LawUnited States Courthouse, Suite 500D One Camino Santa MariaOne Church Street San Antonio, TX 78228-8602Montgomery, AL 36104

Honorable Jerry E. Smith Prof. Daniel J. CapraUnited States Circuit Judge Fordham UniversityUnited States Court of Appeals School of Law12621 Bob Casey U.S. Courthouse 140 West 62nd Street515 Rusk Avenue New York, NY 10023Houston, TX 77002-2698



Meeting of September 18-19, 2003Stevenson, Washington

Draft Minutes

The following members attended the meeting:

Bankruptcy Judge A. Thomas Small, ChairmanDistrict Judge Robert W. GettlemanDistrict Judge Ernest C. TorresDistrict Judge Thomas S. ZillyDistrict Judge Laura Taylor SwainDistrict Judge Irene M. KeeleyBankruptcy Judge James D. Walker, Jr.Bankruptcy Judge Christopher M. KleinBankruptcy Judge Mark B. McFeeleyProfessor Mary Jo WigginsProfessor Alan N. ResnickEric L. Frank, EsquireHoward L. Adelman, EsquireK. John Shaffer, EsquireJ. Christopher Kohn, Esquire

Professor Jeffrey W. Morris, Reporter, and Professor Bruce A. Markell, advisor to the

Committee, attended the meeting.

Bankruptcy Judge Dennis Montali, liaison to the Committee on the Administration of the

Bankruptcy System (Bankruptcy Administration Committee); Peter G. McCabe, secretary of the

Committee on Rules of Practice and Procedure (Standing Committee); and Martha L. Davis,Principal Deputy Director, Executive Office for United States Trustees (EOUST), attended.

Circuit Judge Anthony J. Scirica, chair of the Standing Committee; Circuit Judge Harris L. Hartz,liaison to the Standing Committee; Professor Daniel Coquillette, reporter of the Standing

Committee; and Lawrence A. Friedman, Director, EOUST, were unable to attend.

The following additional persons attended the meeting: James J. Waldron, Clerk, United

States Bankruptcy Court for the District of New Jersey; John K. Rabiej, Chief, Rules Committee

Support Office, Administrative Office of the United States Courts (Administrative Office);

James Ishida, Rules Committee Support Office; James H. Wannamaker, Bankruptcy Judges

Division, Administrative Office; and Robert Niemic, Research Division, Federal Judicial Center(FJC).

-1-

The following summary of matters discussed at the meeting should be read in conjunction

with the various memoranda and other written materials referred to, all of which are on file in the

office of the Secretary of the Standing Committee. Votes and other action taken by the

Committee and assignments by the Chairman appear in bold.

Introductory Matters

The Chairman welcomed all the members, liaisons, advisers, and guests to the meeting.

Judge Zilly welcomed the Committee to Washington state. The Chairman announced the

reappointment of Judge Zilly, Judge Klein, and Mr. Shaffer and the designation of Judge Hartz as

liaison to the Standing Committee. The Chairman recognized Judge Gettleman, whose term

expired with this meeting. The Chairman announced that Patricia Ketchum has retired and Mr.

Wannamaker has replaced her as principal support staff for the Committee.

The Chairman praised the invaluable contributions of District Judge Norman C. Roettger,

Jr., a member of the Committee, who passed away on July 26, 2003. Judge Roettger, who served

on the federal bench for 31 years, had a keen mind and a wealth of knowledge about a wide and

varied array of subjects. In addition to his Committee work, Judge Roettger was a great story

teller and a wonderful dinner companion. Judge Zilly recalled Judge Roettger's appreciation for

the work of the Committee and his contributions. A motion to approve a memorial resolution

recognizing Judge Roettger passed unanimously.

The Committee approved the minutes of the April 2003 meeting.

The Chairman briefed the Committee on the June 2003 meeting of the Standing

Committee. The Standing Committee approved proposed amendments to Rule 9014, technical

amendments to Rules 1011 and 2002, and new Official Form 21. The Standing Committee

approved the Committee's recommendation to publish proposed amendments to Rules 1007,3004, 3005, 4008, 7004, and 9006 for public comment. Comments are due by February 16,

2004, and a public hearing on the comments has been tentatively scheduled for January 30, 2004,

in Washington, D.C. District Judge David F. Levy has been designated as the new chair of the

Standing Committee, replacing Judge Scirica, and District Judge Lee H. Rosenthal has been

designated as the new chair of the Advisory Committee on Civil Rules (Civil Rules Committee),replacing Judge Levy.

The Chairman reported that the Standing Committee discussed interest in possible rules

changes relating to mass torts litigation if Congress fails to act on asbestos legislation. Mr.

Rabiej stated that no decision has been made on holding a mass torts conference to discuss the

situation.

The Chairman reported that the Supreme Court has approved and transmitted to Congress

amendments to Bankruptcy Rules 1005, 1007, 2002, 2003, 2009, 2016, and 7007.1. The

-2-

amendments will take effect on December 1, 2003, unless Congress enacts legislation to reject,

modify, or defer them. The Chairman reported that proposed amendments to the Model Local

Rules for Electronic Case Filing have been placed on the consent calendar for the September

2003 meeting of the Judicial Conference.

Judge Montali reported on the June 2003 meeting of the Bankruptcy Administration

Committee. Circuit Judge Marjorie 0. Rendell has been designated as the new chair of the

Bankruptcy Committee. Judge Montali reported that a major issue at the June meeting was

whether retired bankruptcy judges and magistrate judges who conduct mediation and arbitration

sessions are practicing law, which would disqualify them from receiving cost-of-living increases

in their pensions. Responding to concerns that reversing the Administrative Office's current

interpretation would have a negative impact on the prospects for a cost-of-living adjustment for

active judges, the Bankruptcy Administration Committee agreed to defer consideration of the

issue.

After a spirited debate on proposed adjustments in the Miscellaneous Fee Schedule,

including doubling the fee for motions for relief from the automatic stay, the Bankruptcy

Administration Committee endorsed the changes by a 6-5 vote. The Bankruptcy Administration

Committee recommended that the Judicial Conference express concern regarding legislation to

provide for the expungement of the record of involuntary bankruptcy cases filed against

individuals in bad faith and that the Conference request legislation to permit bankruptcy judges

to hold court outside the district in emergencies.

Action Items

Rule 2002(g) - National Creditor Registry. The Bankruptcy Noticing Working Group

has previously requested that the Committee consider amending Rule 2002(g) to permit creditors

to receive notices on a national or regional basis. In addition, the Working Group asked that the

Committee consider amending Rule 2002(g) to permit creditors to register in a single place the

address or addresses they wish to be used in all cases and in all districts throughout the

bankruptcy system. Section 315 of the Bankruptcy Reform Act of 2003, H.R. 975, as passed by

the House of Representatives, includes a similar provision. When the Working Group's proposal

was discussed at the last Committee meeting, Committee members expressed skepticism about

the software that would be used to match creditor names and addresses in bankruptcy cases with

the creditors who sign up to receive notices on a national or regional basis. The software is

already used to identify creditors that have signed up to receive electronic notices on a district-

by-district basis.

The Technology Subcommittee met on May 19, 2003, in Washington, D.C., and heard

from the contractor that operates the Bankruptcy Noticing Center (BNC) for the Judiciary as well

as AO staff responsible for the noticing program. The contractor and AO staff explained the

operation of the BNC's certified address-verification software, which is comparable to that used

-3-

by the United States Postal Service. The software determines whether any entities listed on thedebtor's schedules have requested electronic notices. If there is not a perfect match between thecreditor name and address supplied on the schedules and the names (or synonyms) and addressesof parties getting electronic notices, the notice is sent by mail to the address on the mailingmatrix. The BNC representatives said approximately 1,100 entities use electronic noticingpursuant to 4,500 noticing agreements with the courts.

The Technology Subcommittee concluded (1) that any national creditor registry shouldonly apply to chapter 7 and chapter 13 cases where high volume creditors are more likely toappear, (2) that the current registration system for electronic noticing works well but deleting therequirement for a separate noticing agreement for each district would facilitate operation of anational creditor registry, (3) that any potential problems with the accuracy and expedience onthe part of notice providers other than the BNC could be addressed by performance standards setby the Administrative Office, and (4) that Rule 2002 should be amended. Judge Zilly, the chairof the subcommittee, said the only question is the form of the amendment.

The Reporter stated that the proposed legislation would let a creditor sign up for thenational creditor registry with any bankruptcy court. He said he followed the proposedlegislation in drafting an amendment to Rule 2 002(g) because there is no downside once you aresatisfied with the accuracy of the system and because creditors take the risk by opting into thesystem. Mr. Frank stated that he was concerned about the possibility of a notice intended for anunregistered creditor going to a creditor that has registered for the system. The Reporter said theBNC's matching software is very good and that there is only a very, very minor chance of aregistered creditor getting a notice intended for an unregistered creditor. Mr. Waldron said thereis an infinitesimal chance of two creditors having the same name and address in the same ZipCode.

The Chairman stated that Rule 2002 covers not just notices given by the BNC, but alsonotices given by the clerk, the chapter 13 trustee, the debtor, and other persons designated by thecourt to give notices. If they are required to send notices to a creditor's registered address, theyneed access to the name- and address-matching software. Mr. Frank stated that he does notunderstand how a debtor would comply if the debtor was required to give notice and if use of thecreditor address registry is mandatory, not a safe harbor. Professor Resnick asked how thenational registry would function if creditors could register an address to be used by all courtswith any court. Mr. Waldron said the clerk would forward the address to the BNC, which wouldmaintain the registry, but that it would be easier for the clerk if creditor addresses were allregistered at one place. Judge Swain suggested that an Official Form be prescribed forregistering creditor addresses. Professor Resnick stated that requiring creditors to file theirpreferred address with the court would have the advantage of making it a matter of record. JudgeWalker asked what filing would mean in this context and how the clerk would keep and treat therequests.

Professor Markell stated that creditors are always trying to make notices directed to a

-4-

creditor's local address, such as a store, ineffective. He said it might be best to craft theamendment as a safe harbor until the proposed legislation passes. Judge Torres suggested addinga sentence that the court's failure to send a notice to a registered address does not render invalid

an otherwise valid address. Professor Resnick suggested tracking that provision in Rule 5003(e).

Judge Montali said the current presumption is that a notice to an address listed by thedebtor actually goes there. The Reporter said the proposed amendment provides that a noticesent to a creditor at its registered address is presumed to be the proper address for the notice. Mr.Adelman said the debtor who puts the correct address on the schedules should not bear the riskthat a notice is mishandled. Professor Resnick said the Committee Note should explain theconsequences of the debtor scheduling a correct address which is not the creditor's registeredaddress and the notice going to another registered address. The Reporter said a computer error inmatching creditor names and addresses would be the same as a postal carrier taking the notice tothe wrong house.

Professor Resnick said the registry of government addresses maintained by the clerkunder Rule 5003(e) could be a model for the amendment to Rule 2002. Judge Klein stated thatthe Rule 5003 registry is available to anyone sending notices. He suggested that someone shouldmaintain a registry of creditor addresses which would be the basis of contractual agreements withcreditors on noticing. The Reporter stated that the Working Group's proposal was not intendedto create a registry as such and that the database of creditor names and synonyms and addresseswould be massive and would have to be updated every time a creditor opens a new store. JudgeKlein said debtors would use a creditor address registry because they want to get the mostaccurate addresses. Professor Resnick said the Committee declined to include municipalgovernments in the Rule 5003 registry because that would have been too many addresses.

Judge Walker suggested providing that a creditor could agree with an entity authorized togive notices as to the place and manner of receiving notices. The Reporter said that noticeproviders could be defined in Rule 9001 and that the provision for creditor agreements withnotice providers could be included in Rule 2002. He said confidence in the notice providerswould come from their certification by the AO. The Chairman said he had proposed thisapproach but that the Administrative Office expressed concern about setting technical standardsand quality controls for authorized notice providers. Judge McFeeley said the clerk's officeshould not be excluded because CM/ECF will have the capacity to do this.

The Committee discussed how a deputy clerk mailing copies of a court order or a chapter13 trustee sending notices would get a creditor's preferred address and how difficult that wouldbe. Judge Klein said the BNC should be given latitude in implementing the proposal. JudgeSwain said the amendment should be permissive, not mandatory, and should apply only tonotices sent by the court. The committee approved in principle permitting a creditor toobtain notices at a preferred address. The Chairman asked the Reporter to preparealternative drafts of the proposed amendment for the next meeting. One draft wouldfollow the subcommittee's recommendation, which would allow a creditor to notify a

-5-

clerk's office of its preferred address. The other draft would allow a creditor and anapproved notice provider to make their own arrangements. Professor Resnick suggested athird approach based on Rule 9036. The Committee agreed to consider that as well.

Rule 9036 - Confirmation of Receipt. Rule 9036 provides that electronic noticing iscomplete when the sender obtains electronic confirmation that the transmission has beenreceived. The Reporter stated that confidence in the delivery of e-mail has increased greatlysince the rule was added in 1993. The Technology Subcommittee met on May 19, 2003, inWashington, D.C., and heard from the contractor that operates the Bankruptcy Noticing Center(BNC) for the Judiciary as well as AO staff responsible for the program. The BNC conducted atest of the top 10 Internet Service Providers (ISPs) and obtained a 99.62 percent success rate forreceipt of the messages, provided that the message contained a link to the notice rather thanincluding the notice as an attachment. Because few ISPs offer return receipts, the Reporter statedthat the confirmation requirement is arguably obsolete and may hinder the use of electronicnoticing if enforced to its letter. The subcommittee recommended deleting the last sentence ofRule 9036, including the confirmation requirement.

Mr. Shaffer questioned why Rule 9014(b) requires that the motion initiating a contestedmatter be served in the manner provided for the service of a summons and complaint in Rule7004 and, as a result, cannot be served electronically. He said many attorneys just serve theattorney for the other party electronically if both parties are already in the case and both attorneysare CM/ECF participants. Professor Resnick stated that contested matters are as important as anyother litigation and, thus, historically service under Rule 7004 was required for contested matters.Judge Walker suggested that the rule be revised to cover a number of other means of sendingnotice, including electronic transmission. Judge Klein stated that because Civil Rule 5(b)(2)(D)already applies in adversary proceedings, the amendment to Rule 9036 should be as close aspossible to the civil rule to avoid inconsistencies between the two rules. The Reporter stated thatRule 5(b)(2)(D) also applies in contested matters.

Judge Zilly suggested adding a statement that the electronic transmission is complete ontransmission. Judge Montali said Rule 9036 should be consistent with Rule 9006(e), whichprovides that service of notice by mail is complete on mailing. The Committee discussedwhether to add to Rule 9036 the provision in Civil Rule 5(b)(3), which is incorporated by Rule7005, that service by electronic means is not effective if the party making service learns that theattempted service did not reach the intended person. Professor Resnick said requiring that anotice reach the intended "person" is ambiguous. Judge Klein said an attorney who does notopen his mail or who is on vacation when notice is given could argue that he or she did notreceive the notice. Mr. Shaffer said signing up for electronic noticing is voluntary and thatparticipants assume the risk that their e-mail system may be down. Judge Walker's motion tostrike the last sentence in Rule 9036 and substitute, "Notice by electronic means is completeon transmission." carried with two dissenting votes.

Restyling Civil Rules. The Civil Rules Committee has initiated a project to restyle the

-6-

Civil Rules. Restyled versions of Civil Rules 1 through 15 were presented to the StandingCommittee in June and approved for publication in August 2004. The Civil Rules Committee iscontinuing its restyling effort and expects to have another substantial portion of the restyled rulesready for presentation to the Standing Committee next year and, if the Standing Committeeapproves, for publication along with the first group of restyled rules.

This Committee discussed whether to begin restyling the Bankruptcy Rules immediatelyor whether to wait. Professor Resnick stated that this Committee should wait to see what theCivil Rules Committee does and then respond. He said many of the Civil Rules are incorporatedverbatim in the Bankruptcy Rules. Because the restyled Civil Rules will not be published until2004 and because many of the changes are technical ones which do not require publication,Professor Resnick said waiting would, at worst, leave the Bankruptcy Rules only a year or twobehind the Civil Rules in restyling. Judge Walker, the liaison to the Civil Rules Committee, saidthe Style Subcommittee of the Civil Rules Committee is very receptive to comments on theimpact of changes in the Civil Rules on the Bankruptcy Rules.

Judge Zilly stated that Civil Rule 5 refers to electronic filings and service by electronicmeans if authorized by a local rule, but that many bankruptcy courts use general orders toauthorize electronic filing and service. Professor Resnick stated that the Standing Committeeprefers local rules, even if the rule refers to a general order. Mr. McCabe said the preferredpractice was that the court authorize electronic filing and service in a local rule and then put thedetails in a general order or administrative procedure.

Mr. Rabiej said Civil Rules 1 through 37 and Rule 45 are to be published and that itwould be difficult for each committee member to review the whole package. He suggested thatthe Chairman assign portions of the restyled rules for review. The Chairman stated that, whenrestyled rules are approved by the Standing Committee, they will be sent to all committeemembers. Any member wishing to discuss any restyled rule should inform the Chairmanand the restyled rule will be added to the agenda for the spring 2004 meeting.

Rule 5001(b) - Court Locations. The courts have been preparing plans to ensure theircontinued operation in the event of emergencies. Mr. Wannamaker stated that, in the course ofthe emergency planning, it became clear that some courts would be best served by conductingmatters in another district. Under the existing statute and Rule 5001(b), there is a seriousquestion as to whether a bankruptcy judge could hold court in the next most available courtlocation. This led to a proposal before the Judicial Conference to seek an amendment to 28U.S.C. § 152(d), which would permit bankruptcy judges to hold court outside of the district ifemergency conditions are present and no location for holding court is reasonably available withinthe district. In addition, it has been suggested that Rule 5001(b) be amended.

Mr. Shaffer suggested moving the phrase, "Except as provided in 28 U.S.C. § 152(d),"from the beginning of the second sentence to after the word "but" in line 7 in the draftamendment prepared by the Reporter. There was no objection. Judge Montali said it

-7-

sometimes is difficult to say just where the court is. For instance, the judge may conduct ahearing by teleconference from a hotel room while the parties and counsel are other locations.Mr. McCabe stated that judges conduct trials from remote locations by videoconference. At thesuggestion of Mr. Rabiej, the Committee approved the proposed amendment in principlebut deferred further action. If legislation is passed authorizing bankruptcy judges to holdcourt out of district, the Chairman stated that the Committee would consider the requestby e-mail ballot.

Rule 7004(b)(3). Judge Robert J. Kressel has urged the Committee to consider revisingRule 7004(b)(3) to clarify the requirement for service of a summons and complaint on acorporation. Judge Kressel observed that the rule is unclear as to whether it requires the name ofan individual who is an officer or appropriate agent on the envelope or whether an envelopegenerically addressed to "any officer, or managing or general agent of XYZ, Inc." also iseffective.

The Reporter stated that Judge Kressel's observation about the ambiguity of the rule isborne out in the case law. The Reporter presented two draft amendments to remove anyperceived ambiguity. The first directed that the summons and complaint be served on a specificindividual and the second was intended to clarify that under the current rule, generic service isacceptable. Professor Resnick and Judge Swain challenged whether the second draftamendment, which changed "an officer" to "any officer" clarifies the matter. Professor Resnicksuggested inserting "by name or office." Mr. Frank stated that the Committee should notincrease the burden on the party serving the summons and complaint and that mail addressed tothe president or chief executive officer of a corporation should get to that person.

Judge Zilly and Judge Klein stated that they are reluctant to deviate from the parallel withthe language of Civil Rule 4(h). Judge Klein said the district judges didn't seem to have aproblem with that language in Rule 4(h). The Reporter stated that the bankruptcy rule permitsservice by first class mail while the civil rule requires delivering the documents to the personnamed. Judge Walker stated that young attorneys may serve the summons and complaintaccording to what they think is required by the rule. He said the Committee could be criticized ifit knows that the existing rule is ambiguous, but doesn't fix it. Judge Montali and Judge Swainsuggested setting out the address to be used in the rule. Judge Small stated that the Committeeshould decide whether to clarify the rule or to leave it as is. With three members dissenting,the Committee decided that the rule was better left alone.

Rule 3007 - Service of Objections to Claims. Judge Kressel has asked the Committeeto consider amending Rule 3007 to clarify the service obligations of parties who object to claims.He suggested that these objections be treated as contested matters with service accomplishedunder Rule 7004 as provided in Rule 9014. The Reporter stated that Rule 9013 recognizes twoforms of requests for orders - motions and applications. Mr. Frank agreed that there is someambiguity in the rules about whether objections to claims are something separate from motionsand applications. Because the claimant has already initiated the matter by filing the claim, Mr.

-8-

Frank said service under Rule 7005 would be more appropriate than service under Rule 7004.Judge Klein stated that the claim is consent to the court's jurisdiction and that, because theobjection to the claim is the equivalent of the answer to a complaint, service should be underRule 7005.

The Reporter presented a draft amendment requiring that an objection to a claim be madeby a written motion. Professor Resnick opposed the change in terminology because, he stated,everybody knows these objections as objections to claims. He stated that requiring service underRule 7005 would allow the objections to be served electronically. Professor Resnick's motionnot to make the change recommended by Judge Kressel carried without dissent.

Rule 3007(b) provides that when an objection to a claim is joined with a demand forrelief of the kind specified in Rule 7001, it becomes an adversary proceeding. Judge Klein statedthat there is confusion in the courts on whether a separate adversary proceeding must be filedafter the objection to claim. The Committee discussed the nature of the affirmative relief underRule 3007 and how a clarification of the reference to an adversary proceeding in Rule 3007(b)should be worded. The Committee agreed that a clarification is needed and that theReporter draft a proposal for consideration at the spring meeting.

Rule 5005(c). Judge Kressel has suggested that Rule 5005(c) be amended to add theclerk of the bankruptcy appellate panel (BAP) to the list of persons who are authorized, whenthey receive improperly filed or transmitted papers, to send the papers on to the proper person.The Reporter suggested also adding district judges to the second part of the rule.

The Committee discussed whether the rule should be revised to include paperserroneously filed in other districts and whether the reference to deeming erroneously deliveredpapers to have been filed is limited to the persons listed in the rule. Judge Walker said thediscussion of hypothetical errors makes it clear that the last sentence refers only to the listedpeople. Judge Swain stated that adding other districts would enable parties to consider bundlingtheir claims for the entire country and filing them in a single district. The Committee agreedwithout dissent to add the clerk of the BAP and district court judges to the list of personswho are authorized to forward erroneously filed or transmitted papers to the properperson.

Rule 9001(9) - Definition of Associate. Robert M. Barnes, a San Diego, Californiaattorney, has requested an amendment to Rule 9001(9) to include accountants who are employedby accounting firms within the definition of "regular associates." The Reporter stated that thedefinition of "firm" in Rule 9001(6), which includes both law firms and accounting firms, is notparallel with the definition of "regular associate," which just includes attorneys. The Reporterpresented a draft amendment to include attorneys regularly employed by, associated with, or ofcounsel to an individual attorney or firm, and accountants regularly employed by an individualaccountant or firm. Judge Montali suggesting specifying law firms and accounting firms. JudgeSwain stated that multidisciplinary practice could create more problems.

-9-

The Reporter stated that the change could focus attention on the rule and prompt othergroups to ask to be included in the rule. The Reporter said that while there may be someambiguity in the rule, the courts appear to be handling it and redrafting the rule may create moreproblems than it would solve. The Committee discussed the application of the rule toaccountants employed by law firms and attorneys employed by accounting firms. Judge Walkerstated that an application for employment could cover the issue. Judge Swain's motion tomake no change in the rule carried without dissent.

Rule 9014 - Electronic Service. Mr. Waldron stated that several electronic filers in hiscourt have complained that they are required to serve the motion initiating a contested matter inthe manner provided for the service of a summons and complaint in Rule 7004. He said theattorneys question why service by mail of a paper copy of the motion is needed when the attorneyfor the party has already received a Notice of Electronic Filing through the CM/ECF system. Mr.Waldron presented draft amendments to Rule 9014 which would permit electronic service of themotion initiating a contested matter under Rule 7005 unless the debtor is the party against whomrelief is sought. The Chairman referred the proposal to the Technology Subcommittee.

Rule 4003(c) - Burden of Proof. At the March 2002 meeting, the Committee consideredwhether to amend Rule 4003(c) to reverse the burden of proof from the objecting party to theparty who would have that burden under applicable nonbankruptcy law. Judge Barry Russell hadraised the issue with the Committee, noting that the allocation of the burden of proof under Rule4003(c) is arguably inconsistent with the Supreme Court's decision in Raleigh v. Illinois Dept. ofRevenue, 530 U.S. 15 (2000). At the time, the Committee determined that it would take noaction on the issue until the case law developed further. The Reporter stated that a number ofcourts have identified the issue but none of them have held that Raleigh renders Rule 4003(c)ineffective. After a brief discussion, the Committee agreed to take no action at this time butto continue monitoring developments in the case law.

Suggestions by the Director of the EOUST Concerning Rules 2003, 4002, 2016, and 7001and Schedule I, and New Official Form. The amendments submitted by Mr. Friedman, Directorof the EOUST, fall into three categories. The first category involves the debtor's obligation toprovide complete and accurate information to the trustee and United States trustee; the secondcategory concerns the debtor's attorney's obligation to disclose compensation received orpromised in connection with the bankruptcy case for the year prior to commencement of the case.The third category relates to the entry of an order denying a discharge under section 727(a)(8) or(9) of the Bankruptcy Code. Ms. Davis presented the proposed amendments. She stated that theamendments would make the bankruptcy process more efficient and effective for the 1.2 milliondebtors who file chapter 7 each year, many of whom receive a discharge and are out of thesystem within 90 days of filing.

-.Schedule I. Ms. Davis stated that a non-filing spouse's income can be material tomaking substantial abuse determinations under section 707(b) of the Bankruptcy Code andevaluating the household expenses set out on Schedule J. She said that requiring chapter 7

-10-

debtors to disclose their non-filing spouses' income on Schedule I would save time and work forthe United States trustees. Schedule I already requires disclosure of the non-filing spouse'sincome in chapter 12 and chapter 13 cases.

Mr. Frank asked whether a husband and wife who are separated would be considered aspart of the same household. The Reporter stated that Schedule J permits them to schedule theirexpenses separately. Several speakers asked whether domestic partners and roommates would berequired to disclose their income and whether their income is relevant to section 707(b)determinations. Professor Resnick said requiring 1.2 million chapter 7 debtors to provide moreinformation outweighs concerns about a small number of section 707(b) cases and that thechange could be viewed as taking a position on the substantive question of whether a non-filingspouse's income is included in the section 707(b) determination. Professor Markell and JudgeMcFeeley stated that a non-filing spouse effectively gets a discharge in a community propertystate, which is another reason for making the change. Judge McFeeley's motion to add non-filing spouses of chapter 7 debtors to Schedule I carried without dissent.

- Rule 7001. Ms. Davis stated that removing objections to the debtor's discharge undersections 727(a)(8) and (9) of the Code from Rule 7001 and permitting the objections to be madeby motion would save time for the United States trustee and the court. Because most section727(a)(8) and (9) objections are uncontested and the debtors are simply ineligible for discharge,she said some courts handle them by show cause orders or motions to dismiss. The Committeediscussed whether previous discharges within six years should be added to the list of automaticbars to discharge under Rule 4004(c) and whether the debtor would get a discharge under thecurrent rule if the United States trustee missed the deadline for filing an objection based on aprevious discharge.

Judge Montali stated that objections to discharge for previous discharge are a completewaste of time. Professor Resnick stated that the discharge is so important that it should not bedenied automatically. Several committee members questioned whether permitting theseobjections to discharges to be filed as motions would save time and resources, especially if theUnited States trustee could move for default against the debtor. Professor Wiggins stated thatthere is a distinction between objections under section 727(a)(8) and objections under section727(a)(9). Ms. Davis agreed that objections under section 727(a)(9) for previous discharges inchapter 12 or chapter 13 present more factual issues. The Chairman deferred the proposal tothe next meeting.

* Rule 2016(b) and New Official Form. The proposed amendments to Rule 2016(b)would require that the debtor's attorney disclose the details of the legal services to be provided,whether the attorney has taken any interest in property from the debtor, and whether the attorneyhas received any payments from the debtor within a year prior to the filing, regardless of whetherthe fees were in connection with or in contemplation of the bankruptcy filing. Ms. Davis statedthat the proposed changes in attorney fee disclosures are intended to address two problems -debtors who have no idea of the details of their attorney's fee disclosure (or of the extent of the

-11-

legal services to be provided) when fees are disputed later in the case and attorneys who bundlenon-bankruptcy services with the bankruptcy filing, arguably in order to avoid disclosing the fullextent of their fees under the existing rule. Judge Klein said it is possible to argue that thebundled prepetition services were in anticipation of bankruptcy and must be disclosed under thecurrent rule.

Professor Resnick stated that the rule is to implement section 329 of the BankruptcyCode, which only requires the disclosure of fees in contemplation of or in connection with thebankruptcy case. The Reporter stated that the proposal raises questions of substantive law andgoes beyond what can be fixed by changing the form. Professor Resnick questioned adopting arule aimed at unethical lawyers when the rule goes well beyond the statute. Questioned aboutwhether the proposal could require the disclosure of confidential or sensitive matters such aspotential criminal matters or consideration of divorce, Ms. Davis said the disclosure form couldbe filed under seal. Judge Zilly stated that disclosing the payments for unrelated services wouldgo beyond the statute but would not be privileged, but that disclosing the nature of the servicesmay be a different matter. He said disclosing the fees would at least trigger a further inquiry bythe United States trustee. Judge Gettleman said if the information is privileged, the attorney canassert the privilege and request redaction.

The Committee discussed the practice of unbundling services in which an attorney mayagree only to prepare the petition and schedules and represent the debtor at the meeting ofcreditors. Professor Markell said some bankruptcy courts permit unbundling and others do not,but that the details of the legal services to be provided is a matter of disclosure. Judge Kleindescribed the situation in which an attorney will not represent the debtor on a motion for relieffrom the automatic stay without additional payment. As a result, he said his court uses a districtcourt rule to require attorneys to represent the debtor for the entire case except for adversaryproceedings.

Mr. Frank questioned why the debtor should have to sign another piece of paper when itis the attorney's disclosure, not the debtor's. The Reporter stated that the debtor would sign thedisclosure so that the attorney would not lie. Mr. Adelman said disclosure is good for theattorney and may provide a "safe harbor." Judge Walker said the change could be made in theStatement of Financial Affairs, which is signed by the debtor. The Committee agreed torequire the disclosure of all payments by the debtor within a year prior to the filing, eitherin the attorney fee disclosure or in the debtor's Statement of Financial Affairs. TheChairman asked the Reporter to circulate alternative drafts within a month. ProfessorResnick asked whether the change should be limited to chapter 7 and chapter 13 cases since Rule2014 already applies in chapter 11 cases. Ms. Davis agreed that consumer cases are the focus ofthe proposal but stated that section 329 applies across the board.

- Rules 2003 and 4002. Ms. Davis stated that the trustee has a statutory duty toinvestigate the financial affairs of the debtor and the debtor is under a statutory obligation tosurrender books and records relating to property of the estate. She said the proposal to require

-12-

the debtor to bring certain core documents to the meeting of creditors may impose a burden onthe debtor but that she believes the documents would have been assembled by debtor and thedebtor's attorney to prepare the schedules and statement of financial affairs. Ms. Davis statedthat, if the debtor can't produce the documents, the debtor could file a statement explaining whynot. She said the proposal was based on similar local rules.

Mr. Frank stated that the proposal would be a dramatic change in bankruptcy practice.He said the production of key backup documents in every case would raise the expense of filingbankruptcy substantially. The debtor is already under oath at the meeting of creditors and subjectto further inquiry and production of documents. He said the United States trustee assumes theproduction will produce a significant number of objections to discharge and additionaldistributions to creditors but that, ultimately, it is a value judgment and matter of costs vs.benefits. Mr. Frank suggested that the proposal is so controversial that it should be referred to asubcommittee, which could solicit additional comments and report back to the full Committee.

Judge Zilly said the debtor should bring the crucial documents to the meeting of creditors,rather than the trustee having to continue the meeting for their production. Judge Torres askedwhy it would be onerous to produce the listed documents at the meeting. He said the documentsappear to be relevant and the trustee would have to review them at some time. Judge Walkersaid a more practical, focused proposal is needed. He said the production should be treated as anobjection to discovery documents, with the debtor required to produce only what the trustee isgoing to consider carefully. Judge Walker asked whether the debtor would be required to bringcopies of the documents or the originals, which would be reviewed by the trustee during themeeting. One Committee member asked whether the trustee might image the documents at themeeting and return them to the debtor.

Professor Markell said the debtor already supplies the information in summary form onthe schedules and statement of financial affairs. The trustee reviews the schedules andstatements before the meeting of creditors and the meeting itself is very routine in most cases.He said the trustee inquires further when needed and continues the meeting in those cases.Professor Markell said the proposal would alter the cost of filing bankruptcy for consumerdebtors and their attorneys. By analogy, he said, despite the existence of tax fraud, taxpayershave to file only limited information on their tax returns.

Judge Torres asked about the possibility of the United States trustee requestingdocuments before the meeting of creditors if the documents appear to be needed on the basis of areview of the schedules and statements. Professor Markell and Mr. Frank said informaldiscovery of this sort goes on now in many districts. Professor Wiggins said a targeted list ofwhat is absolutely necessary would help the Committee make a cost-benefit analysis.Judge Gettleman asked whether, if the trustees are already doing their job, bringing lots of papersto the meeting would change things. Mr. Adelman stated that the proposal raises a privacy issuebecause the debtor's Social Security number is on some of the listed documents, including taxreturns, which could be viewed by a number of people. He said, however, that some of the listed

-13-

documents stand out because their production would expedite the case and uncover issues.Professor Morris said all of the listed documents could be the basis of an objection to discharge ifthe debtor failed to produce them at the trustee's request. Professor Resnick stated that theproposal is an extreme one based on the assumption that the debtor is dishonest.

The Committee accepted Judge Klein's motion to refer the proposal to theSubcommittee on Consumer Issues. The Chairman stated that the subcommittee couldmeet in Washington, D.C., on January 30, 2004, and invite a focus group similar to the oneconvened on the privacy amendments to provide input from different viewpoints. JudgeZilly asked the EOUST to be more specific in light of the Committee's discussion. Mr. Shafferasked about the requirement in the proposed amendment to Rule 4002 that, if the debtor used anincorrect Social Security number, the debtor must take steps to correct the bankruptcy courtrecord and notify credit reporting agencies. Ms. Davis said one reason for the provision is toprovide a road map for debtors and their attorneys so that they can furnish more accurateinformation.

Information Items

Uniform Rules. Rule 9029 states that local rules must conform to any uniformnumbering system prescribed by the Judicial Conference. The Conference has directed thatcourts adopt a numbering system for local rules that corresponds with the relevant federal rules.(JCUS - SEP 88, p. 103; JCUS - MAR 96, p. 34). As the bankruptcy courts have begunaccepting electronic filings over the Internet, the courts have been reviewing their local rules todetermine how the rules should be revised to reflect the new electronic environment. Mr.McCabe stated that the Office of Judges Programs has received a number of requests for copiesof the Uniform Numbering System for Local Bankruptcy Court Rules or for information on thesystem. The Uniform Numbering System was issued by the Committee in 1996 and revisedslightly in April 2003. Earlier this year, copies of the Uniform Numbering System weredistributed to all bankruptcy judges and posted on the JNET.

E-Government Act. Section 205(c)(3) of the E-Government Act of 2002, Pub. L.107-347, requires that the Supreme Court prescribe rules to protect privacy and security concernsrelating to the electronic filing of documents and the public availability of documents filedelectronically. Mr. Rabiej said that the statute mandates that the new rules provide that a partyfiling a redacted document also may file an unredacted copy of the document under seal. At therequest of the Judiciary, legislation has been introduced deleting the provision for dual filing.Mr. Rabiej said the Standing Committee has appointed a subcommittee to consider the rulesrequired by the Act. He said changes may be needed in the bankruptcy rules, the civil rules, andthe criminal rules.

Amendments to §§ 107 and 342(c) of the Bankruptcy Code. The Judiciary has requestedrevision of sections 107 and 342(c) of the Bankruptcy Code. The amendment to section 107

-14-

would authorize the court to redact "personal identifiers" in order to protect any person fromidentity theft or other harm. In addition, the revision would expand the scope of information acourt could protect from "scandalous or defamatory matter" to "information that could causeundue annoyance, embarrassment, oppression or risk of injury to person or property." Theamendment to section 342(c) would provide that a debtor include only the last four digits of hisor her Social Security account number on notices the debtor provides to creditors.

Changes in the Claims Process. The CM/ECF Working Group's claims processingsubcommittee is preparing recommendations to modify the proof of claim form and the processfor filing claims in order to facilitate electronic filing and to accommodate the trade in buyingclaims. Judge McFeeley, the liaison to the subcommittee, said the proposed amendments are notyet ready to be submitted to this Committee. He said the revised form would be more suitablefor filing claims as a datastream to the courts which are prepared to accept it.

If a claim is transferred after the proof of claim is filed, Rule 3001 (e) requires that theclerk notify the alleged transferor by mail. Mr. Waldron said many claims buyers obtain noticewaivers from the sellers although there are questions about the effectiveness of the waivers andhis court does not allow them. He said processing the transfer of claims constitutes the largestincrease in the clerk's office's workload in many districts. Professor Resnick said if there isfraud in the transfer, there also could be fraud in the waiver. Professor Markell said there is alegitimate business in buying consumer claims in bulk, even discharged chapter 7 claims. TheChairman stated that there is less concern about fraud when legitimate entities buy claims inchapter 13 but Judge McFeeley said it is difficult to write a rule that just applies to "legitimate"companies.

Professor Resnick stated that the 1991 amendments to the rule deleted disclosure of thecompensation for the transfer and narrowed the provision to the disclosure of possible bogustransfers. The Reporter stated that the nature of the creditors involved has changed since 1991,when the transfer of chapter 11 claims was at issue. Professor Resnick said a cost-benefitanalysis may be appropriate because the perception is that more sophisticated buyers arepurchasing claims from vendors who should know what they are doing.

Implementation of the CM/ECF System. Mr. Wannamaker reported that implementationof the Case Management/Electronic Case Files (CMiECF) system in the bankruptcy courts iscontinuing. Fifty-nine bankruptcy courts are live on the system and another twenty-nine courtsand the District of Guam are in the process of implementing CM/ECF.

FJC Study of Mandatory Disclosure under Civil Rule 26. Mr. Niemic discussed theproposed study by the FJC of whether certain types of adversary proceedings should be exemptedby rule from the mandatory disclosure provisions of Rule 7026 and Civil Rule 26. The study isintended to determine whether certain types of adversary proceedings are resolved before duedates for Rule 26 disclosures. Mr. Niemic said the study could include whether attorneys aremaking the disclosures or stipulating that they will not make them, whether judges are exempting

-15-

attorneys from the disclosure requirements, whether the judges think mandatory disclosure makessense in adversary proceedings, and whether the courts are doing anything to increase compliancewith the rule.

Mr. Niemic asked whether the Committee wanted a study based on a survey of thebankruptcy judges and, if so, whether the survey should be of a sample of the judges or of allbankruptcy judges. The Chairman suggested an email survey of all bankruptcy judges. He saidthe survey would remind the judges of the mandatory disclosure requirements in the rule. JudgeKlein said the response rate might be lower with an email survey but that it could show the extentof support for the conventional wisdom that the mandatory disclosure is unnecessary. TheChairman asked Mr. Niemic to go forward with the survey with the help of Judge Kleinand another committee member to be designated later.

Administrative Matters

The Committee's next scheduled meeting will be at the Ritz-Carlton Hotel, AmeliaIsland, FL, on March 25-26, 2004. The Committee discussed several locations as possible sitesof the fall 2004 meeting, including Seattle, Monterey, Chicago, Santa Fe, Sundance, and LasVegas. The Subcommittee on Consumer Issues will meet in Washington, D.C., on January 30,2004. Trustees and debtors' attorneys will be invited to participate in the January 30 meeting.

Respectfully submitted,

James H. Wannamaker, III

-16-

Judge Small and Professor Morris will report orally on

the January 2004 meeting of the Standing Committee.

Judge Montali will report orally on the January 2004

meeting of the Bankruptcy Committee.

MEMORANDUM

TO: ADVISORY COMMITTEE ON BANKRUPTCY RULES

FROM: JEFF MORRIS, REPORTER

RE: WRITTEN COMMENTS ON PROPOSED RULES

DATE: MARCH 7,2004

In August, 2003, we published for comment proposed amendments to Bankruptcy Rules

1007, 3004, 3005, 4008, 7004, and 9006. In short, the amendment to Rule 1007 establishes a

requirement that the debtor file a mailing matrix consistent with practice under virtually all local

rules, and the amendments to Rules 3004 and 3005 are intended to make those rules consistent

with § 501 (b) and (c) of the Bankruptcy Code. The amendment to Rule 4008 would establish a

deadline for filing reaffirmation agreements and would allow the courts to hold the required

hearings in those cases at times most appropriate to their dockets and schedules. Rule 7004

would be amended to authorize the clerk to issue summonses electronically, and the proposed

amendment to Rule 9006 would clarify the method for counting the three-day period when

service is made either by United States mail or electronically.

We received a total of seven comments on the proposals, and two of the comments were

unqualified in their support of the proposals. Those comments were submitted by Mr. Jack

Horsley (Comment 03-BK-001) and by the State Bar of California Committee on Federal Courts

(03-BK-006). The remaining comments addressed the proposed amendments to Rules 3004,

3005, 4008, and 9006. No comments were submitted regarding the proposed amendments to

Rules 1007 and 7004.

Comments on Rules 3004 and 3005

Mr. Mark Van Allsburg, the Clerk of the Bankruptcy Court for the District of Hawaii,

submitted a comment on the proposed amendment to Rule 3004 in which he suggested that the

rule amendment should not continue the requirement currently in the rule that requires the clerk

to mail notice of the filing to the creditor, the debtor and the trustee. Comment 03-BK-004. He

notes that it is often difficult even to know that a particular proof of claim is being filed by the

debtor or the trustee so that the clerk may not be aware of a need to notify the other parties of the

proof of claim. He suggests that the rule might authorize someone other than the clerk to give

the notice, or the rule could simply direct the person filing the proof of claim to serve a copy of

the claim on the debtor, the creditor and the trustee. Since this is not a change in the current rule,

the comment could be considered a proposal that the Committee should consider at a subsequent

meeting. The suggestion also could be addressed by an amendment to Official Form 10 that

would add a check box to the form for a person to indicate that they are not the creditor who

holds the claim, but rather that they are filing the claim either under Rule 3004 or 3005.

Hon. Dennis Michael Lynn (B. J., N.D. Tx.) submitted the second comment on Rules

3004 and 3005. Comment 03-BK-005. Judge Lynn's comments were addressed primarily to

Rule 3005. He first suggested that the cross reference on lines 2 and 3 of Rule 3005 to "Rule

3002 or 3003(c)" should be changed to read "Rule 3002(c) or 3003(c)" to make it parallel to the

language in Rule 3004. That "inconsistency" exists in the current rule, although the Committee

Note to Rule 3005 does not indicate any reason why the inconsistency should exist. It seems that

making the cross references in both Rules 3004 and 3005 is appropriate. That would simply

require the insertion of "(c)" after "3002) in the rule. Judge Lynn's second suggestion for Rule

2

3005 is to move the phrase "file a proof of the claim" from line 7 of the proposed rule to line 2 of

the proposal and immediately after the word "may". That would make the structure of Rules

3004 and 3005 more consistent. Again, I believe this is a valuable suggestion that the Committee

should adopt.

Judge Lynn also suggested an amendment to Rule 9006(b)(3) in connection with the

proposed changes to Rules 3004 and 3005. He suggests that Rule 9006 be amended to provide

that the enlargement of time for filing a proof of claim either under Rule 3004 or 3005 be

permissible only to the extent allowed under Rules 3002 (c) or 3003 (c). This proposal is not

addressed to the amendments that were published for comment, so it is more appropriate to

consider the suggestion as one that the Committee should evaluate at a future meeting.

Comments on Rule 4008

We received three comments on the proposed amendment to Rule 4008 that establishes a

thirty day deadline after the entry of the discharge for the filing of reaffirmation agreements.

Judge Robert E. Grant (B.J. N.D. IN.) expressed support for the adoption of a deadline for the

filing of the agreements, but he took issue with the deadline set in the proposed amendment.

Comment 03-BK-002. Specifically, he is concerned that the rule allowing the agreements to be

filed post-discharge will create problems for the courts that will be called upon to determine

whether the agreement was made prior to the entry of the discharge as required by the Code. His

proposal is to require that the reaffirmation agreement be filed prior to the entry of the discharge

in order to avoid this type of litigation. The Committee considered the timing of the filing and

selected thirty days after the discharge for several reasons. Most significantly, the timing of the

entry of the discharge is subject to local practice, and in many districts the discharge order is

3

entered quite early in a case. The debtor and creditor who are parties to the reaffirmation

agreement may not know when the order will be entered, and if the agreement is made before

that time, it should still be enforceable even if it takes a bit longer to accomplish the filing of the

agreement with the court. Moreover, another reason for setting a deadline is to inform the courts

of the need to hold a hearing. The fairly short time after the entry of the discharge that is allowed

for filing the agreement should not delay the proceedings generally, and it should bring whatever

applicable issues need to be addressed to the attention of the bankruptcy court in a timely

fashion. Perhaps the Committee Note should be expanded to state these reasons for selecting a

time after the entry of the discharge within which the agreement can be filed.

Judge Grant's suggestion that the reaffirmation filing date be the same as the discharge

date was also proposed by Mr. Henry J. Sommer, a former member of the Committee.

Comment 03-BK-003. Mr. Sommer argues that the discharge date is a better deadline for filing

th reaffirmation agreement also because in some jurisdictions the cases are closed very quickly

after the entry of the discharge. He suggested that if the Committee proceeds with the thirty day

post-discharge deadline, that the Committee should amend Rule 5009 to prohibit the closing of

cases until 30 days after the entry of the discharge.

Mr. Van Allsburg, the Clerk of the Bankruptcy Court for the District of Hawaii, also

urged the Committee not to provide a post-discharge deadline for filing reaffirmation

agreements. Comment 03-BK-004. Mr. Van Allsburg noted that the proposed deadlines will

extend the life of cases and prevent the clerk from closing the cases as quickly as is done under

the current practice. He stated that the delay in the closing of the case also will postpone creditor

collection efforts that § 362 (c)(2)(A) would allow once the case is closed. It is unlikely that the

4

new deadline would have this impact given that the stay would already have expired under

subsection (c)(2)(C) of that section. Thus, I do not believe that this provides a basis for objection

to the deadline.

Comments on Rule 9006

As noted above, Judge Lynn suggested a new amendment to Rule 9006 to limit the

enlargement of time for filing claims under Rules 3004 or 3005. Comment 03-BK-005. That

comment was not addressed to the proposed amendment published for comment. The only

comment received on the proposed amendment to Rule 9006 was submitted by Mr. Alex

Manners of Compulaw LLC in Los Angeles. Mr. Manners' objection to the rule (his comments

were addressed also to the comparable amendment of Civil Rule 6) primarily concerned the

application of the rule in situations where intervening Saturdays, Sundays and holidays are

excluded. These are time limits of less than 10 days under the Civil Rules and less than 8 days

under the Bankruptcy Rules. Mr. Manners offered language to resolve the issue he raised,

although it is unclear to me how his proposal is clearer than that offered by the Civil and

Bankruptcy Rules proposals. The published amendments each include Committee Notes that set

out specific examples of the operation of the rule. In fact, Rule 9006 has an even more extensive

Committee Note than the Civil Rules counterpart, and I believe that the Committee Note is

sufficient to address the problem noted by Mr. Manners.

5

2003 BANKRUPTCY RULES COMMENTS CHART03-BK NAME OF INDIVIDUAL DATE RULE DATE RESP - DATE OF

AND/OR ORGANIZATION I REC'D FOLLOW UP

03-BK-001 Jack E. Horsley, J.D. 10/17/03 All 10/23/03(Also03-AP-011,03-CV-002,03-CR-002)

03-BK-002 Judge Robert E. Grant 10/29/03 4008 11/4/03

03-BK-003 Henry J. Sommer, Esq. 11/17/03 4008

03-BK-004 Mark Van Allsburg, Clerk 12/12/03 3004(Two 4008separatee-mails)

03-BK-005 Judge Dennis Michael Lynn 1/13/04 3004,3005,9006

03-BK-006 State Bar of California 2/14/04 All(Also Committee on Federal03-AP-393, Courts (Robert J. Schulze,03CV-008, Chair)03-CR-004)

03-BK-007 Alex Manners 1/29/04 9006(Also03-CV-012)

Feknry 16, 2004Pae IProect

17/0JAcKc E. HORaSLEY, J.D.

Lkw-•-,IA-UTHORFE•OLLowAxIERxCAN COLLEGE oF TRIL LATwY-Ys

913 NORTH SIST STRZ3ET • MATTOON, ILLI•NOIS 61938-2271 03AP-(217) 235-5954 05//

G•wm1nA-&, JAGD (Hox. REs. [RET.]) ABLE: JALEYSEE WHO'S WHO Ix AXERIzA AANLJ

WHO'S WHO I AxEIicAN L&w

WHO'S WHO hr Tim Wolg 3=amo0~3-BK- oI

October 10, 2003

Peter G. McCabe, ESqSecretary.,Committee on Rules of Practi-e And Procedure anof tbe 3 CJudicial Conference of the United StatesWASHobfibW D. C. 20544

Dear Mr. McCabe: 0 G wTb.h k" you for your communicatin of AugustO26tb and

the Prelinary Draft of Proposed Amendments.1 havestudied the Draft carefully. It honors me to havebeen privileged, at - :your invitation, to make numerousanalyses and suggestions about the work of yourCommittee.

The Preliminary Draft impresses me favorably..I notedespecially the :report on Rule 4 (Appeal As Of Right).I checked my files and I note it appears tot:wke into consideration one of the suggestions I madein one of my. saa.lytical respouses.To correct the uninteadedambiguity in the comprehensive restyling of the1998 Appellate Rules.. is something about which I commentedin anu.,,eu&y.-a.ibi.hb I submitted. kud clarifying thatonly written notice :ia whicb the time to iallo0w toreopen. the time to appeal is well supported..

Furtbermore, altbougb I have bad in my practice onlyii'i-im experience in b#ankruqtc-ycases, I like the proposal. aboutthe time to make it incum.bent on "the de*btot.* ib.ivoluntary..c, e to submit the list of names to wbicb thePreliminary i.raft -efers..

Also, It is prudent to amend Rule"t 27 (Notions) to incorpor-4tetbe new subdivision to which riefereuce is made in thePreliminary Draft.

-2-

On balance it is my best judgment that the Prelinary Draftcovers various amendments wisely. and look upon itgitb favor.

Again, I thank you and your Committee for inviting meto particate by suggestipus, and reactions to the...-excellent work being done,

Respectfully,

" CK E. FORSLET, J. D.

JKH:mm

-4

UNITED STATES BANKRUPTCY COURT

RN, ORTHERN DISTRICT OF INDIANA

ROBERT E. GReANT, JUDGE m""'• a2128 E. ROSS ADAIR FEDERAL BUIXDnXG TEL•mEONz: (260) 426 - 24551300 SOUTH HARRISON STREET

FACSMhIJL: (260) 424 - 3716FORT WAYNE, INDIANA 46802

October23, 2003

Peter G. McCabe, SecretaryCommittee on Rules of Practice and ProcedureAdministrative Offices of the U.S. CourtsThurgood Marshall Federal BuildingWashington, D.C. 20544

Re: Proposed Amendment to Bankruptcy Rule 4008

Dear Mr. McCabe:

I was pleased to see that the committee proposes to amend Rule 4008 of the Federal Rules ofBankruptcy Procedure so that it includes a deadline by which reaffirmation agreements must be filed.Unfortunately, I think the committee has chosen an inappropriate deadline. Rather than thirty daysafter the entry of an order granting a discharge or confirming a chapter 11 plan, a much better choicewould be to require reaffirmation agreements to be filed before either of those two events. The longerdeadline the committee proposes risks creating confusion,, as well as additional and otherwiseunnecessary litigation.

Using the date of discharge as the deadline for filing reaffirmation agreements establishes areadily discemable and easily enforceable bright-line standard. It is also consistent with § 524(c)(1)of the Bankruptcy Code when it requires such agreements to be "made before the granting of thedischarge." Allowing an additional thirty days beyond that date to file the agreement seems to dilutethe statutory requirement and, by doing so, lays the groundwork for otherwise unnecessary litigation.I can easily imagine a set of circumstances arising after a def'ault under a reaffirmation agreement filedduring the thirty days following the entry of discharge, where the defaulting party defends based uponthe proposition that the agreement was not made prior to the discharge but was really made shortlythereafter and is, therefore, unenforceable. I can also see controversies, and eventually publishedopinions, over how much of a reaffirmation agreement must be decided upon, and what terms can beleft open, and still permit the agreement to be made before the discharge is granted. The courts alreadyface these issues in civil litigation involving questions of contract formation. There is no reason toimport them into the reaffirmation process.

I realize that debtors and creditors are not always able to complete the reaffirmation process,or to prepare and execute the documents needed to memorialize their understanding, prior to the entryof discharge. Nonetheless, the existing rules already provide a solution to this problem through Rule4004(c)(2), which allows the court to defer the entry of discharge at the debtor's request. Indeed, I

always understood that one of the primary reasons for this particular provision was to give debtors andcreditors additional time to complete the reaffirmation process.

The opportunity which Rule 4004 provides for deferring discharge also eliminates the need forthe proposed change in Rule 4008 to allow the court to extend the time for filing reaffirmationagreements. The committee note to this portion of the proposed rule indicates that it contemplates the

- court having broad discretion to permit the late filing of reaffirmation agreements. This, I submit,creates fertile ground for breeding otherwise unnecessary litigation. Of course, no one really careswhether or not a reaffirmation agreement is enforceable until someone has defaulted in theperformance of their obligations under it. I can easily imagine scenarios in which reaffirmationagreements are not filed until someone becomes interested in enforcing them. Of course, under thosecircumstances, the party in default would certainly like to have the opportunity to persuade the courtthat, in the proper exercise of its discretion, it should not permit the untimely filing - thereby renderingthe agreement unenforceable. To make matters worse, this will often be taking place years after thebankruptcy case has been closed. Consequently, an issue which otherwise could quite rightly havebeen left to the state court - the enforcement of the reaffirmation agreement itself - will end upspawning satellite litigation in the bankruptcy court over a completely preliminary question - whetherthe belated filing of the reaffirmation agreement should be permitted.

It is in everyone's best interest for debtors and creditors to know precisely where they standwith one another at the conclusion of the bankruptcy. The proposed amendment to Rule 4008 doesnot facilitate this. Instead, by allowing reaffirmation agreements to be filed after - sometimes wellafter - the discharge has been entered, the proposed amendment leaves the relationship unsettled.Ambiguity is reduced when everyone can look to clearly discernable and readily identifiable rules toguide their conduct. Such rules also reduce the possibilities for litigation. I realize that it is not alwayspossible to design procedural rules in ways that eliminate ambiguity or the possibility of litigation overtheir requirements. Nonetheless, this is not one of tho~e situations. The deadline for filingreaffirmation agreements is one which readily lends itself to clearly identifiable, unambiguousdeadlines. Indeed, Congress has already established such a deadline for the making of the agreement.The courts should reinforce that decision by creating an equally firm and identifiable deadline for thefiling of the agreement.

I hope that the committee will reconsider its proposed amendment to Bankruptcy Rule 4008.I would suggest something along the following lines:

A reaffirmation agreement shall be filed prior to the entry of an order granting adischarge. In the event additional time may be needed to file the agreement, the entryof discharge may be deferred in accordance with Rule 4004(c)(2).

Thank you for your consideration.

REG/JF

03-BK-)03Henry J. Sommer" To: <[email protected]>

<[email protected] cc:M> Subject: Comment on Proposed Amendment to Bankruptcy Rule 4008.11 /17/2003 10:11 AM

I applaud the Advisory Committee for its proposal to set a deadline forthe filing of reaffirmation agreements, which I have long advocated.However, I do not agree that the deadline should be 30 days after thedischarge. My experience is that cases are sometimes closed immediatelyafter the discharge is entered and that clerks refuse to accept filingsin closed cases. Since this practice is unlikely to change, it makessense to make the discharge date the deadline for filing a reaffirmationagreement, an agreement which in any event must be made before thedischarge. In fact, I understand that a number of courts currently havelocal rules requiring reaffirmation agreements to be filed before thedischarge, and there have been few problems with such rules.

If the Committee believes that a later deadline for filing isnecessary, which creditors and perhaps some debtors' counsel wouldprobably prefer, it should probably also amend Rule 5009 to prohibit theclerk's closing of the case until 30 days after discharge.

Henry J. Sommer oPhi±ladtIphia, PAPhone 215-242-8639Fax 215-242-2075

Mark Van Allsburg To: [email protected]

12/11/2003 07:07 PM Subject: Comment on Proposed FRBP 3004 0KDear Committee Members:

The proposed rule provides that the Clerk provide notice to the trustee, the debtor and to the creditorwhen the trustee or the debtor files a claim on behalf of a creditor. The current rule has the sameprovision.

This is a real problem for the clerk's office. It is often very difficult to recognize that a claim has been filedby the trustee or by the debtor. Often the only clue is the signature on the bottom of the claim and thecourt staff does not pay much attention to this when docketing the claim.

Unless there is something in the Code which requires.that notice be sent by the Clerk, then this ruleshould be written to require that the Clerk, or some other person as the court directs, shall send thenotice. Or, and better yet, the rule could provide that the filing party serve copies of the claim to thecreditor and trustee or debtor and then file a proof of service.

The wording of this section suggests that this duty cannot be delegated to another party which only makessense if there is a Code provision which requires this. I don't see one - although I could be wrong.Unless there is some good policy consideration this duty should be one which can be delegated.

Mark Van AllsburgClerk, USBC Hawaii

03-BK-(OMark Van Allsburg To: [email protected] - ..

cc:12/11/2003 07:32 PM Subject: Proposed FRBP 4008

The proposed rule provides that parties will have 30 days after discharge to file a reaffirmation agreement.This rule is going to significantly delay the closing of cases. Presently this court, and probably manyother courts, close cases at the same time as the discharge is issued. There are a lot of reaffirmationagreements filed and if we are required to allow such agreements to be filed for 30 days after thedischarge then we will not close the cases for 30 additional days. And if it is a pro se debtor, the chancesare really good that the closing will be delayed another 30-60 days for a hearing. I am not sure that this isterrible, but it will negatively affect creditors who waiting until a case is closed before certain collectionactions [e.g. repossessions of collateral on debts which have not been reaffirmed. In the past, theparties were motivated to get reaffirmations done well before a discharge because they did not know withcertainty when the discharge would be issued. I think that this is going to cause cases to last longer andthat this will have negative effects.

Mark Van AllsburgClerk, USBC Hawaii

UNITED STATES BANKRUPTCY COURTNORTHERN DISTRICT OF TEXAS 03=BK-CD

501 WEST TENTH STREET, ROOM 128FORT WORTH, TX 76102-3643

CHAMBERS OF Telephone: (817) 333-6020DENNIS MICHAEL LYNN Facsimile: (817) 333-6002

U.S. BANxurircy JUDGE

January 6, 2004

Honorable A. Thomas Small, ChairAdvisory Committee on Bankruptcy RulesCommittee on Rules of Practice and Procedureof the Judicial Conference of the United StatesWashington, D.C. 20544

Dear Judge Small:

I respectfully submit the following suggestions regarding the proposed amendments tothe Federal Rules of Bankruptcy Procedure:

1. In the first sentence of Rule 3005, the reference should be to "Rule 3002(c)" toconform to the amendment to Rule 3004.

2. I would also suggest moving the later phrase "file a proof of the claim" tofollow the word "may" in order to conform to Rule 3004.

3. I suggest further amending Rule 9006 to limit after-the-fact extensions of timefor filing proofs of claim under Rules 3004 and 3005 based on excusableneglect. Extension under Rule 3004 or 3005 should only be permissible to theextent allowed under Rule 3002(c) or RuVe 3003(c).

I hope these suggestions are of use.

Sincerely,

Dennis Michael Lynn

DML:bj

Lf 03-AP-3 3180 Howard Street

~~THE STATE BAR •oH~ ~o

San Francisco, CA 94105-1639O C L OATelephone: (415) 538,2306OF CALIFORNIA Fax: (415) 538-2305

A - COMNM`TEE ON FEDERAL COURTS03BK-0~03-BK- oo

February 13, 2004 03-CVi 00Via E-Mail: Rules Comments(a),aomuscourtsx-ov.' 03 mC R m 60qPeter G. McCabe, SecretaryCommittee on Rules of Practice and ProcedureAdministrative Office of the U.S. CourtsOne Columbus Circle, N.E.Washington, DC 20544

Re: Proposed Federal Rule of Appellate Procedure 32.1

Dear Mr. McCabe:

The Advisory Committee on Appellate Rules of the United States Judicial Conference(the "Advisory Committee") has proposed Federal Rule of Appellate Procedure 32.1, requiringcircuit courts to permit citation of "unpublished" judicial opinions, orders, judgments and otherwritten dispositions.

The State Bar of California's Committee on Federal Courts ("Committee") has reviewedand analyzed proposed Federal Rule of Appellate Procedure 32.1ý and appreciates theopportunity to submit these comments.1 The Committee believes the new rule would haveadverse effects on access to and administration ofjustice in the federal courts, and thereforeopposes proposed Rule 32.1.2

The Committee has considered the Report of the Advisory Committee on AppellateRules, dated May 22, 2003 ("Advisory Committee Report"), and the arguments in favor of andagainst the adoption of Rule 32.1. The Committee recognizes that certain considerations mightweigh in favor of Rule 32.1. The Advisory Committee states that an estimated 80 percent ofopinions issued by the circuit courts during recent years have been designated "unpublished."As a result, the Advisory Committee Note recommends adoption of the new rule for two

'The Committee's comments on other proposed amendments to the Federal Rules of Appellate, Bankruptcy, Civil,and Criminal Procedure are contained in a separate letter.2 By way of background, the Committee is comprised of attorneys throughout the State of Califomia who specializein federal court practice and volunteer their time and expertise to analyze and comment upon matters that have animpact on federal court practice in California. The Committee consists of a broad range of federal practitioners,including members with civil, criminal, bankruptcy, immigration, and appellate experience.

Peter G. McCabe, SecretaryFebruary 13, 2004Page 2

essential reasons: (1) to create a uniform standard of citation among the nation's courts,3 and (2)to eliminate the risk of sanctions for citation of unpublished opinions.4 Although these goals arewell-intentioned, the adoption of Rule 32.1 will likely lead to negative consequences'which faroutweigh any potential benefits.

The Committee believes that adoption of Rule 32.1 would adversely impact access tojustice by certain disadvantaged parties - including non-institutional, pro se, and prisonerlitigants - while providing an advantage to institutional litigants with significant resources tomonitor and analyze the vast number of unpublished decisions - such as the U.S. Department ofJustice and institutional litigants. Initial access to unpublished decisions will be dependent uponcomputers and Internet access. Those parties lacking the necessary resources - or even theaccess to such resources in the case of prisoners - would be denied access to potentially relevantlegal authority. Such limited access would unfairly disadvantage non-institutional, pro se, andprisoner litigants.5

The Committee also considered whether Rule 32.1 would result in a decrease in judicialefficiency and therefore impair the quality ofjustice. The Committee believes Rule 32.1 wouldundermine the courts' effective use of summary dispositions in routine cases. Each court shouldmaintain the discretion to issue unpublished, uncitable opinions, briefly informing the parties ofthe decisional basis in routine cases. These non-precedential cases, presenting simple issues ofwell-settled law, are appropriate for unpublished summary disposition, without the discussion,reasoning and analysis necessary for opinions which may later be cited.

The Committee evaluated opposing scenarios that would likely result from the adoptionof Rule 32.1. The Committee believes courts may spend significantly greater resources and timepreparing unpublished decisions if they were made citable by Rule 32.1. The Committee isconcerned that if unpublished decisions could be cited beyond the scope of each particular case,

3 Local circuit rules differ in their treatment of the citation of unpublished opinions - some allow it, others do not.According to the Advisory Committee, the "conflicting rules create a hardship for practitioners, especially thosewho practice in more than one circuit." Advisory Committee Report at 27. The Ninth Circuit Court of Appeals anddistrict courts within the Ninth Circuit prohibit citation of "unpublisheT opinions except in very limitedcircumstances. The Advisory Committee recognized that all circuit courts allow unpublished opinions to be cited insome circumstances, such as to support claims involving issue preclusion, claim preclusion, law of the case, doublejeopardy, sanctionable conduct, abuse of the-writ, notice, or entitlement to attorney's fees. Advisory CommitteeReport at 31.

The Advisory Committee states that it "believes that restrictions on the citation of 'unpublished' or 'non-precedential' opinions - the violation of which'can lead to sanctions or to formal charges of unethical conduct - arewrong as a policy matter." Advisory Committee Report at 27. According to the Advisory Committee, Rule 32.1"will further the administration ofjustice by expanding the sources of insight and information that can be brought tothe attention ofjudges and making the entire process more transparent to attorneys, parties, and the general public."Id. at 35.

Some members of the Committee believe the potential impact of Rule 32.1 should be evaluated empirically, afterfll implementation of the E-Government Act of 2002. Under the E-Government Act of 2002, every court ofappeals will be required to post all of its decisions - including unpublished decisions - on its website. That mighthave an impact on access to unpublished opinions, at least for litigants who otherwise have access to computers andthe Internet.


authoring judges would likely spend unnecessary time and resources preparing carefullyreasoned opinions in routine cases. Under this scenario, the Committee believes that Rule 32.1 islikely to impair the administration ofjustice by (1) needlessly increasing judicial workloads inthe issuance of routine, unpublished case decisions, (2) diverting valuable judicial time andresources from crafting important published decisions affecting the law of a circuit, and (3)lengthening the period of time between the filing of an appeal and its disposition.6 Alternatively,Rule 32.1 may lead courts to conserve judicial resources by issuing single-word dispositions inroutine cases (e.g., "affirmed," "reversed"), rather than devoting time to crafting a carefully-worded opinion that sets forth the grounds or legal bases for disposition. Such an approachwould allow courts to avoid drafting the brief statement found in current unpublished decisions,but would deprive litigants of any explanation of the court's decision. Moreover, the absence ofeven a short, plain explanation may adversely affect further appellate review. Neither scenarionoted above would be a desirable result.

For the reasons discussed above, the Committee opposes the adoption of proposed Rule32.1.

Disclaimer

This position is only that of the State Bar of California's Committee on FederalCourts. This position has not been adopted by the State Bar's Board of Governors oroverall membership, and is not to be construed as representing the position of the State Barof California. Committee activities relating to this position are funded from voluntarysources.

Very truly yours,

Robert J. Schulze, ChairState Bar Co Aiittee on Federal Courts

cc: Members, State Bar Committee on Federal CourtsSaul Bercovitch, Staff Attorney, State Bar of California

6 The Committee understands that, in the Ninth Circuit, unpublished cases outnumber published cases by a factor ofmore than 5 to 1. Rule 32.1 could therefore have a significant impact on the time and attention devoted toresearching and preparing the large body of unpublished decisions, which would likely slow judicial dispositionrates significantly. See Hart v. Messenari, 266 F.3d 1155, 1178 (9'" Cir. 2001) ("[Tihe judicial time and effortessential for the development of an opinion to be published for posterity and widely distributed is necessarily greaterthan that sufficient to enable the judge to provide a statement so that the parties can understand the reasons for thedecision.")

180 Howard Street

~~THE STATE BAR i0Hwr eSan Francisco, CA 94105-1639

OF CALIFORNIA Telephone: (415) 538-2306

-- COMMrIrEE ON FEDERAL COURTS

February 13, 2004

Via E-Mail: Rules Comments(a),ao.uscourts.gov

Peter G. McCabe, SecretaryCommittee on Rules of Practice and ProcedureAdministrative Office of the U.S. CourtsOne Columbus Circle, N.E.Washington, DC 20544

Re: Proposed Amendments to the Federal Rules

Dear Mr. McCabe:

The State Bar of California's Committee on Federal Courts ("Committee") has reviewedand analyzed the proposed amendments to the Federal Rules of Appellate, Bankruptcy, Civil,and Criminal Procedure, and appreciates the opportunity to gUbmit these comments.* By way ofbackground, the Committee is comprised of attorneys throughout the State of California whospecialize in federal court practice and volunteer their time and expertise to analyze andcomment upon matters that have an impact on federal court practice in California. TheCommittee consists of a broad range of federal practitioners, including members with civil,criminal, bankruptcy, immigration, and appellate experience.

I. FEDERAL RULES OF APPELLATE PROCEDURE

A. Rule. 4

The Committee supports in part an amendment to Rule 4(a)(6) proposed by the AdvisoryCommittee on Appellate Rules, and suggests certain modifications to the proposed amendment.

Under Rule 4(a)(1)(A), an appellant must appeal a judgment or order within 30 days afterits entry. Rule 4(a)(6) permits the district court to reopen the time for noticing an appeal on themotion of an appellant who has missed the deadline because he did not receive prompt notice ofentry of the judgment or order in question. The proposed amendment to Rule 4(a)(6) would

The Committee's comments on proposed Federal Rule of Appellate Procedure 32.1 are contained in a separateletter.


substantively alter the Rule by changing (1) the circumstances qualifying as the threshold failureto receive notice, and (2) what triggers the deadline for bringing the motion.

The Committee supports the amendment as it relates to number (1), but proposes asomewhat different approach as to number (2). Generally, the Committee understands that theproposed amendment is intended to add clarity and certainty to the circumstances in which Rule4(a)(6) comes into play;, part (1) appears to achieve this goal, but part (2) does not.

1) Proposed amendment affecting the circumstances qualifying as the threshold failureto receive notice.

The Rule presently allows a motion to reopen the time for noticing an appeal when theappealing party was entitled to but did not timely receive notice, without further defining thetermr "notice." The amendment would specify that the notice to which the Rule refers is "noticeunder Federal Rule of Civil Procedure 77(d)." This change would appear to achieve the desiredgoal of eliminating litigation, confusion, and possible circuit splits on that issue. Therefore, theCommittee supports this part of the proposed amendment.

2) Proposed amendment affecting what triggers the deadline for bringing the motion.

The Rule presently sets a time limit for bringing a motion for additional time to file thenotice of appeal "within seven days after the moving party receives notice of the entry." Theproposed amendment would change this time limit to "within 7 days after the moving partyreceives or observes written notice of the entry from any soitrce." (Emphasis added.) TheCommittee believes this change would increase rather than decrease litigation, and would resultin confusion and possible circuit splits regarding proper application of the revised Rule.

The proposed new requirement that the triggering notice be "written" appears to be animprovement over the present version of the Rule. The Rule currently refers to "notice" astriggering the seven-day deadline without stating whether that notice must be in writing. Somecircuits have held that the notice must be written (e.g., Bass v. U.S. Dept. ofAgriculture, 211F.3d 959, 963 (5th Cir. 2000) (collecting cases)), while others such as the Ninth Circuit haveheld that oral notice is a sufficient trigger if the "quality of the communication" makes it "thefunctional equivalent of written notice." Nguyen v. Southwest Leasing & Rentao, Inc., 282 F.3d1061, 1066 (9P Cir. 2002). The amendment cures this conflict - as well as hair-splittingregarding when oral notice is the equivalent of written notice - by starting the clock only upon"written" notice of the judgment or order to be appealed.

However, the requirement that the notice be written does not eliminate all ambiguity orpotential for litigation over when the time for bringing a motion under the Rule has begun to run.For example, it is not clear whether an e-mail is a "written" notice. Cf., Carafano v.Metrosplash.Com. Inc., 339 F.3d 1119, 1122 (9th Cir. 2003) ("she also received numerous phonecalls, voicemail messages, written correspondence, and e-mail from fans through herprofessional e-mail account").


Another proposed change to the Rule actually introduces new ambiguities. Specifically,under the proposed amendment, the seven-day, clock begins running when the moving party"receives or observes" notice 'from any source." (Emphasis added.) This appears to be anexpansion of the circumstances under which the time to bring a motion starts to run. Because theproposed amendment opens the door to more informal methods of receiving notice, it introducesnew uncertainties regarding when the time for bringing a motion under the Rule has begun torun.

Factual disputes regarding whether notice -has been "observed" are likely to arise when aparty opposing a motion under this section tries to show that the moving party had "observed" anotice that he had not "received." If, for example, the moving party's counsel can be shown tohave looked at the docket in the court's office, or to have visited a website on which the docket isposted, the court might have to determine whether he or she actually focused on the line itemindicating entry of the judgment or order.

It appears, then, that in attempting to bring greater clarity and certainty to the Rule'sapplication, the proposed amendment gives with the right hand but then takes away with the left.The amendment requiring the triggering notice to be "written" should instead be coupled withthe requirement that the moving party has actually received a piece of paper containing thenotice, rather than merely "observing" the notice in some unspecified manner subject to dispute.Receipt of written notice is objectively determinable and less prone to difficult factualdeterminations than mere observation, which can be fraught with difficulties of proof.

The Committee believes that a better approach would be to tie the triggering event forfiling a motion, like the circumstances qualifying as the threshold failure to receive notice, to thewell-defined event of notice under Federal Rule of Civil Procedure 77(d). Specifically, the Ruleshould be amended to require that the motion be filed within a specified time after notice underFederal Rule of Civil Procedure 77(d) has been given. This change, like the other part of theamendment discussed above, would add clarity and certainty to the Rule, rather than re-injectingthe uncertainty that the first part of the amendment was intended to eliminate.

The Committee therefore recommends that the proposed amendment should allow a partyto bring a motion to reopen the time to file a notice of appeal only if.

"the motion is filed within 180 days after the judgment or order is enteredor within 7 days after the moving party is given notice under Federal Ruleof Civil Procedure 77(d) of the entry of the judgment or order sought to beappealed, whichever is earlier."

B. Rules 26 and 45

The proposed amendments to Rules 26 and 45 redesignate "Presidents Day" as"Washington's Birthday" to conform to 5 U.S.C. § 6103(a), the statute officially establishing the


third Monday in February as "Washington's Birthday." The Committee supports this

amendment.

C. Rule 27

The Committee supports the proposed amendment to proposed Rule 27(d)(1)(E), whichprovides that a motion, a response to a motion, and a reply to a response to a motion mustcomply with the typeface requirements of FRAP 32(a)(5) and the typestyle requirements of Rule32(a)(6). The purpose of the proposed new subdivision (E) is to promote uniformity in federalappellate practice and to prevent abuses that might occur if no restrictions were placed on thesize of typeface used in motion papers. This addition represents an attempt to promote fairnessso as to better ensure that all parties have the same amount of text available for inclusion in theirappellate motion papers.

D. Rule 28

The proposed change to Rule 28 would amend subdivision (c), addressing reply briefs, todelete a sentence that authorized an appellee that had cross-appealed to file a brief in reply to theappellant's response. All rules regarding briefing in cases involving cross-appeals have beenconsolidated into Rule 28.1. The proposed amendments would also delete subdivision (h),addressed to briefs in a case involving a cross-appeal. All rules involving such briefing havebeen consolidated into new Rule 28.1.

The Committee supports the proposed amendments f6 Rule 28 because it makes moresense to have all of the rules that pertain to cross-appeals consolidated under one rule.

E. Rule 28.1

New Rule 28.1 would provide a comprehensive set of rules governing briefing in casesinvolving cross-appeals. Some existing rules have been moved into new Rule 28.1 and somenew provisions have been added to fill the gap in the exislig rules. The new rules reflect thecurrent practice of the large majority of the circuits and have been patterned after therequirements of Federal Rules of Appellate Procedure 28, 31 and 32 on briefs filed in cases thatdo not involve cross-appeals. Subdivision (c) provides for the filing of four briefs in a caseinvolving a cross-appeal:

(1) "aVpellant's prncipal brief' must comply with Rule 28(a), must not exceed 30 pages,and it must be served and filed within 40 days after the record is filed,

(2) "ap~ellee's principal and response brief' serves as the principal brief on the cross-appeal, it must also comply with Rule 28(a), must not exceed 35 pages, and must beserved and filed within 30 days after the appellant's principal brief is served;


(3) "aWpellant's response and reply brief' must comply with Rule 28(a)(2) -(9) and (11),must not exceed 30 pages, and must be served and filed within 30 days after theappellee's principal and response brief is served; and

(4) "appellee's reply brief' must comply with Rule 28(c), must not exceed 15 pages, andmust be served and filed within 14 days after appellant's response and reply brief isserved.

In addition, Rule 28.1 provides for type-volume limitations. The type-volume limitationsallow an appellant 14,000 words in its principal brief and 14,000 in its combined response andreply brief, for a total of 28,000 words. The appellee/cross-appellant is allowed 16,500 wordsfor its combined principle brief and response brief and 7,000 for its reply brief for a total of23,500 words. The Committee agrees that because cross-appeals are often protective in natureand the issues raised are often related to the underlying appeal, the cross-appellant does notnecessarily always need as many words/length of brief as the appellant. Moreover, if a particularcross-appellant finds that he or sheis in need of additional words/length of brief to argue his orher position, that cross-appellant may then file the appropriate motion with the court.

In summary, the Committee supports proposed Rule 28.1 as drafted.

F. Rule 34

The proposed amendment to Rule 34 is found at subdivision (d), addressing cross-appealsand separate appeals. A cross-reference has been changed to reflect the fact that, as part of aneffort to collect within one rule all provisions regarding briefing in cases involving cross-appeals,former Rule 28(h) has been abrogated and its contents moved to new Rule 28.1(b).

The Committee supports this amendment.

G. Rule 35

The Committee supports the proposed amendment-6 Rule 35(a), which addresses when ahearing or rehearing en bane may be ordered by a court of appeals. The new rule would amendRule 35(a) so that a "majority of the circuit judges who are in regular active service and who arenot disqualified may order that an appeal or other proceeding be heard or reheard by the court ofappeals en banc." (proposed amendment in italics). Currently, two national standards - 28U.S.C. § 46(c) and Rule 35(a) - provide that a hearing or rehearing en banc may be ordered by"a majority of the circuit judges who are in regular active service." Although these currentstandards apply to all of the courts of appeals, in practice, the circuits follow three very differentapproaches when one (or more) active judges are disqualified, as the Advisory Committee hasrecognized. Under the new rule, all circuits would follow the "case majority" approach, wherebydisqualified judges would not be counted in the base in calculating whether a majority of judgeshave voted to hear a case en bane.


The Committee supports the proposed amendment for the same reasons set forth by theAdvisory Committee. First, the Committee believes that it is important for all circuits to follow aconsistent approach with respect to when a hearing or rehearing en banc is ordered. There arefundamental fairness concerns when an appellant's opportunity to have a hearing or rehearing enbanc is largely dictated by the differing procedural approaches of the various circuits. Therefore,the Committee agrees with the proposed Committee Note that the courts of appeals "should notfollow two inconsistent approaches in deciding whether sufficient votes exist to hear a case enbanc, especially, when there is a governing statute and governing rule that apply to all circuitsand that use identical terms, and especially when there is nothing about the local conditions ofeach circuit that justifies conflicting approaches." Second, the "absolute majority" approach' hasan important drawback because it treats a disqualified judge, as a practical matter, as havingvoted against hearing a case en banc, even when that is not in fact true. Finally, the Committeeagrees that the absolute majority approach is less preferable than the case majority approach,because the former can lead to the unjust result whereby the en banc court is left withoutauthority to overturn a panel decision with which almost all of the circuit's active judgesdisagree .

2

II. FEDERAL RULES OF BANKRUPTCY PROCEDURE

The Committee supports the proposed amendments to Bankruptcy Rules 1007, 3004,3005, 4008, 7004, and 9005. The proposed amendments are designed to make notice provisionswithin the Rules consistent, and follow local practice.

IMI. FEDERAL RULES OF CIVIL PROCEDURE

A. Rule 5.1

New Rule 5.1 would impose a notice requirement on parties and a certificationrequirement on courts in cases where a party questions the constitutionality of a federal or statestatute but the federal government (in the case of a challenge to a federal statute) or the stategovernment (in the case of a challenge to a state statute) is not a party to the case. The purposeof these notice and certification requirements is to give the federal or state government anopportunity to intervene in the litigation.

Under this approach, disqualified judges count in the base in considering whether a "majority" ofjudgeshave voted for hearing or rehearing en banc.2 For example, in a case in which five of a circuit's twelve active judges are disqualified, the case cannotbe heard en banc even if six of the seven non-disqualified judges strongly disagree with the panel opinion,thereby permitting one active judge effectively to control circuit precedent, even over the objection of allof his or her colleagues.


Relocating the existing notice requirement from Rule 24 seems likely to highlight thenotice requirement in a way the current rules fail to do. Imposing the notice requirement on theparty making the constitutional argument seems logical, not particularly burdensome, and fair inlight of the no-forfeiture provision of proposed subdivision (d). Accordingly, the Committeesupports the concept underlying the proposed rule.

The Committee does not support, however, two specific provisions of the rule, andrecommends that these provisions be changed. First, in subdivision (c) the proposed rule sets aminimum 60-day period for intervention by the federal or state government. The Committeedisagrees with this provision, because the Committee believes it could tend to freeze action in acase for that 60-day period, to the potential detriment of a plaintiff seeking timely relief.3 Ratherthan setting a blanket 60-day intervention period, the Committee believes the rule should leavethe timing-of-intervention issue to the discretion of the courts, since in individual cases it likelywill make sense to allow for a shorter or longer intervention period as circumstances vary.

The Committee notes that while current law provides for intervention of right by thefederal government or a state government in a case raising a constitutional challenge, there is nominimum time period for intervention specified under current law. 28 U.S.C. § 2403. TheCommittee is aware of no evidence showing that the lack of a specified minimum period forintervention has caused any prejudice to the ability of the federal and state governments to winadmission to cases in order to defend the constitutionality of their laws. The Committee alsonotes that Federal Rule of Civil Procedure 24 does not set a minimum period for interventiongenerally and instead provides only that intervention must be "timely," with timelinessdetermined by the circumstances of the individual case. Fed. R. Civ. P. 24(a), (b). To follow thesame timing principle in new Rule 5.1, the Committee urges that subdivision (c) be deleted fromthe proposed rule.

Finally, the Committee is not persuaded by the justification for the 60-day interventionperiod advanced in the Committee Note - that this period "mirrors" the 60-day periodestablished by Rule 12(a)(3)(A) for the federal government to file an answer to a complaint.Timing considerations can be different at the beginning of a case than in a case that may havebeen on file for months or years, as numerous cases subje& to the notice requirement ofproposed Rule 5.1 will have been. The Committee also notes that certain statutes require thefederal government to answer complaints in less than 60 days, so the 60-day period establishedby Rulel2(a)(3)(A) does not apply uniformly in all cases. See, e.g., 5 U.S.C. § 552(a)(4)(C)(requiring federal government to answer Freedom of Information Act complaint within 30 days);16 U.S.C. § 1855(f)(3)(A) (requiring federal government to answer complaint under Magnuson-Stevens Act within 45 days).

3 The Committee recognizes that the Committee Note states that "the court retains authority to grant anyappropriate interlocutory relief' during the pendency of the 60-day period. As a practical matter, though,the Committee believes that the specification of a minimum 60-day intervention period could make it lesslikely that a court will grant relief during this period, as some courts will be inclined to wait 60 daysbefore acting.


As a separate issue, the Committee notes that, read literally, proposed Rule 5. 1(a) wouldseem to require a party to file multiple notices of constitutional questions in a single case, sincesuch a notice seemingly must be filed after each "pleading, written motion, or other paper" thatdraws the constitutionality of a state or federal statute into question. Such a requirement formultiple notices seems unnecessary to accomplish the purpose of providing notice, andunreasonably burdensome to the party raising the constitutional challenge. The Committeesuggests that the proposed rule be redrafted to provide that a party need only file a notice ofconstitutionality once in any given case.

B. Rule 6(e)

Rule 6(e) sets forth the method for counting the time to respond to a pleading when thepleading is served by mail or one of the other methods set forth in Rule 5. Currently, Rule 6(e)provides that three additional days are to be provided but fails to state whether those days are tobe added to the beginning or end of the prescribed period or taken into account by some othermeans. The proposed amendment clarifies that the additional days added to the response timeare to be added after the prescribed period expires. The Committee supports this clarification.

C. Rule 27

The Committee supports the proposed amendments to Rule 27, which correct an outdatedreference to Rule 4(d), and make other conforming changes.

D. Rule 45

The Committee supports the proposed amendments to Rule 45, which would be updatedto conform to Rule 30, requiring that a notice of deposition set forth the means by which thedeposing party intends to record the deposition

IV. FEDERAL RULES OF CRIMINAL PROCEDURE

A. Rule 32

The Committee supports the proposed amendments to Rule 32, which would be modifiedto provide for allocution for victims of felonies that do not involve either sexual abuse orviolence.

B. Rule 32.1

The Committee supports the proposed amendments to Rule 32.1, which would bemodified to address allocution rights at revocation and modification hearings.


C. Rule 59

The Committee supports proposed new. Rule 59, which sets forth a procedure for adistrict judge to review nondispositive and dispositive decisions by magistrate judges.

Disclaimer

This position is only that of the State Bar of California's Committee on FederalCourts. This position has not been adopted by the State Bar's Board of Governors oroverall membership, and is not to be construed as representing the position of the State Barof California. Committee activities, relating to this position are funded from voluntarysources.

Very truly yours,

Robert J. Schulze, ChairState Bar Committee on Federal Courts

cc: Members, State Bar Committee on Federal CourtsSaul Bercovitch, Staff Attorney, State Bar of California

Owlm pLAW- 10277 West Olympic Boulevard-A • Td-T Los Angeles, CA 90067

The Court Rules Standard Ph. (310) 553-3355 . (800) 444-0020Fx. (310) 553-7'6M

0 3 C m 0 1 info @ compulaw.com

wwwMxompulaw~com

03-BK-007

January 29, 2004

Peter G. McCabe, Secretary of the Committee on Rules of Practice and ProcedureAdministrative Office of the CourtsOne Columbus Circle, N.E.Washington, DC 20054

Dear Mr. McCabe:"

Please find attached comments on proposed changes to Federal Rule of CivilProcedure 6(e) and Federal Rule of Bankruptcy Procedure 9006. I have alsosubmitted these comments electronically via the Internet.

Sincerely,

Alex MannersDirector of Product DevelopmentCompuLaw LLC

Comment on Proposed Change to Federal Rule of Civil Procedure 6(e) and FederalRule of Bankruptcy Procedure 9006.

The current language of Rule 6(e) is silent on how time periods of less than 11 days arecalculated when service is performed by mail and the time period is therefore subject tothe provisions of Rule 6(a) and (e). The proposed amendment is a step in the rightdirection, but is still ambiguous as to this issue. The amendment also leaves anotherissue unresolved, and creates a new area of ambiguity, as discussed below.

The proposed amendment does nothing to clarify the question of whether the threeadditional days added by Rule 6(e) are calendar days, or are subject to Rule 6(a) andare to be counted as court days (excluding holidays and weekends). This issue can beresolved by amending Rule 6(e) to state that.the three additional days are calendardays, or by adding language to state that the three days are not subject to therequirements of Rule 6(a).

Furthermore, the proposed amendment to Rule 6(e) may lead to confusion whencalculating deadlines-where the original period counted is longer than 10 days and,therefore, includes holidays and weekends. The question that arises is: If the last dayof the original period lands on a holiday or weekend, does one move the date to thenext court day pursuant to Rule 6(a) and then count the three additional days?Pursuant to the proposed language of Rule 6(e), 'the period' may be interpreted as thefinal day resulting from the original calculation, with the three days 'added after theperiod.'

For example,

If a party is to respond to a discovery request 30 days after service of thedemand, and the demand is served by mail, and the 30th day is a Saturday, thenthe last day of the original period for response would be moved to the followingMonday. Then, pursuant to proposed Rule 6(e), if the 3 days are added after theprescribed period, the response would be due on the following Thursday.

This method of calculation would be a departure from, the traditional and acceptedmethod currently used, whereby attorneys simply count 33 days to determine thedeadline.

The following changes to the proposed rule would clarify the issues stated above.

(e) Additional Time After Certain Kinds of Service. Whenever a party must ormay act within a prescribed period after service and service is made under Rule5(b)(2)(B),(C), or (D), 3 calendar days are added to the period, unless the periodis less than 11 days, in which case 3 calendar days are added after the period.

However, the new language that is proposed for Rule 6(e) and used in the suggestionabove may still be confusing, as the difference between adding three days 'to' or addingthree days 'after' the period is not obvious. While in the process of amending this rule,

Submitted by Alex Manners. January 28h, 2004

why partially clarify it when there is an opportunity to write a clear and unambiguousrule? With this in mind, Rule 6(e) should be amended as follows:

(e) Additional Time After Certain Kinds of Service. Whenever a party must or may actwithin a prescribed period after service and service is made under Rule5(b)(2)(B),(C), or (D), 3 calendar days are added to the period. If the original periodis less than 11 days, the original period is subject to Rule 6(a), whereby holidaysand weekends are excluded from the computation, and then three calendar daysare added.

All comments here also apply to the proposed amendments to Federal Rule ofBankruptcy Procedure Rule 9006.

Submitted by Alex Manners. January 28h, 2004

2003 CIVIL RULES COMMENTS CHART

03-CV NAME OF DATE RULE DATE DATE OFINDIVIDUAL AND/OR REC'D RESP FOLLOW

ORGANIZATION UP

03-CV-001 Thomas J. Yerbich, 10/7 6Court Rules Attorney,District of Alaska

03-CV-002 Jack E. Horsley, J.D. 10/17 All(Also03-AP-011,03-BK-001,03-CR-002)

03-CV-003 Prof. Patrick J. Schiltz 10/20 6

03-CV-004 Paul McNeill, Esq. 10/21 All(Also03-AP-014)

03-CV-005 Judge Geraldine Mund 10/21 5.1(Also03-BK-F)

03-CV-006 Eugene F. Hestres, Esq. 10/29 45

03-CV-007 S. Christopher Slatten, 12/19 6Esq.

03-CV-008 State Bar of California 2/14/04 5.1, 6, 27, 45(Also Committee on Federal03-AP-393. Courts (Robert J.03-BK-006 Schulze, Chair)03-CV-00803-CR-004)

03-CV-009 State Bar of Michigan 2/5/04 5.1, 6(Also Committee on U.S.03-AP-394 Courts (Joseph G.03-AR-005) Scoville, Chair)

03-CV-010 Bill Lockyer, Attorney 2/9/04 5.1(Also General, State of03-AP-395) California

March 5, 2004Page IProjects

03-CV NAME OF DATE RULE DATE DATE OFINDIVIDUAL AND/OR REC'D RESP FOLLOW

ORGANIZATION UP

03-CV-011 U.S. Dept. of Justice 2/13/04 5.1,6(Peter D. Keisler,Assistant AttorneyGeneral, Civil Division)

03-CV-012 Alex Manners 1/29/04 6(Also03-BK-007

03-CV-013 Federal Magistrate 2/9/04 5.1, 6, 27, 45,(Also Judges Association and Admiralty03-CR-006) (Judge Louisa S. Porter, Rules B & C

President)

March 5, 2004Page IProjects

03-CV-ool

~ OJ~p~,UNITED STATES DISTRICT COURT ,~ -

FOR THE DISTRICT OF ALASKACOURT RULES ATTORNEY

222 West Seventh Avenue, Stop 4Anchorage, Alaska 99513-7564

e-mail [email protected] ,

Thomas J. Yerbich (907) 677-6)36Court Rules Attorney

September 26, 2003

Peter G. McCabe, SecretaryCommittee on Rules of Practice and ProcedureAdministrative Office of the U.S. CourtsWashington, DC 20544-0001

Re: Proposed Amendment to Rule 6, F.R.Civ.P (December 2005 Class)Dear Mr. McCabe:

It is respectfully suggested that perhaps the Advisory Committee rejected what is the simplestapproach, adding the three days to the prescribed period, too quickly in its attempt to clarify theapplication of Rule 6(e). The perceived impact on Rule 6(a) could easily be avoided by simplyadding in the third sentence the words "determined without regard to subsection (e)" after the word"days" and before the comma (,). In so doing, the 10 days would not become 13 as the Committeefeared. In tracking response times, this court uses the method of adding the three days to theprescribed number of days and, where the prescribed period is less than 11 days, uses business daysinstead of calendar days. For example, if the prescribed period is 10 days, count out 10 businessdays, then add three calendar days. If the prescribed period was 11 days or more, simply add thethree days and count calendar days, e.g., a 15-day prescribed period becomes 18 calendar days. Ineither instance, if after adding the three calendar days the last day falls on a Saturday, Sunday orHoliday, the response is due on the next business day. This is a very straightforward, uncomplicatedmethod. In addition, in using that method, the "business" days available for response (disregardingany possible intervening holidays) for a 15-day period is fairly uniform: 13 days if served onMonday, Tuesday or Wednesday, and 12 days if served on Thursday or Friday.The Committee appears to have focused almost exclusively on the interaction between 6(e)and 6(a). What the Committee does not appear to have addressed is the effect of substituting "after"for "to" in 6(e) when the last day of the prescribed period ends on a Saturday: as will be the case inevery instance where the prescribed period is 15 days (a commonly used prescribed number of days)and the day of service is a Friday. If one simply adds three days "to" the 15 days results in theresponse being due 18 days after mailing, or on a Tuesday (even if Monday is a holiday). However,if the prescribed period is computed as provided in Rule 6(a), the 15 days would not end on Saturdaybut on the following Monday (if not a holiday) or Tuesday (if the following Monday is a holiday).Adding the three days to that would make the response due on the following Thursday (if Mondayis not a holiday) or Friday (if Monday is a holiday). This is going to require those responsible fortracking response time (court and law office support staff) to remember that, if the service date is

Peter G. McCabeSeptember 26, 2003Page 2

a Friday, one can not simply count out the requisite of days (if service is effected on a day other thanFriday, it makes no difference which method is used unless the last day of the prescribed period isa Tuesday that is also a holiday). In addition, if service is on Friday, the period in which to respondis 14 business days compared to 12 days if served on a Thursday or 13 days if served on any otherday.±' The rule in many offices will be "serve on Thursday and never on Friday." If something ismailed late on Thursday, it will probably not be delivered until the following Monday. If mailed onFriday, it will also probably be received on the following Monday. The difference is that therecipient has 13 full business days to respond to the Friday service and only 11 full business daysto respond to the Thursday service! Surely this is an unintended result. It also provides one moregambit for attorneys to employ in the game of one-upmanship that far too many practitioners employthese days.-'

A similar situation arises when the last prescribed day falls on a Tuesday that also happensto be one of the traditional holidays. Although the effect on the number of days to respond is notthat dramatic, it does impose somewhat of a greater burden on those tracking response times. If thethree days is simply added to the prescribed days, the response would come due on a Friday withoutfurther checking. However, the proposed amendment to 6(e) requires the "tracker" to note that thepreceding Tuesday was a holiday and, therefore, the response is not due until the following Monday.Just one more intermediate count to be made and item to be checked; another potential area for errorsto occur.

I suggest that there is an easier and less confusing method of clarifying the situation:1. Amend subsection (e) by substituting "number of days" for "period" at the end of the sentence;and2. To eliminate any adverse impact on the 11-day rule, in the third sentence of subsection (a), add"determined without regard to subsection (e)" after the word "days" and before the comma (,).This approach eliminates the need to check whether the last day of the prescribed number of daysfalls on a Saturday, Sunday or holiday before adding the three days under Rule 6(e) yet results inuniformity. It also eliminates the significant disparity between Thursday or Friday service in thosesituations where the prescribed time is 15 days (or any other situation where the last prescribed dayotherwise falls on a Saturday).

/For Friday service: five days of each of the first two following weeks plus four days of thethird week following service. For Thursday service: one day of the week of service, five days ineach of the first and second weeks following plus one day in the third week following service.

!-'-The cynicism stemming from more than three decades in the practice of law and three scoreyears of living does tend to surface from time to time.

Peter G. McCabeSeptember 26, 2003Page 3

One comment on counting the days if the time is determined in reverse, i.e., preceding anevent. The easiest solution to that is to have the prescribed period be "not later (or less) than the(number of days) before (the triggering date of event)." That way if the number of days countedbackwards fall on a Saturday, Sunday or holiday, the due date would always be the last business daypreceding. Perhaps this could be accomplished by adding a new subsection (f) to Rule 6 reading:

Whenever a party has the right or is required to do some act or take someproceedings within a period of time before a specified date or event prescribed orallowed by these rules, by the local rules of any district court, by order of court, orby any applicable statute, the right must be exercised, the required act performed orthe proceedings taken, not later than the prescribed time preceding the specified dateor event.

Thank you and the Advisory Committee for considering the foregoing comments.

Ver Ily.ours,

Co Rule s Attorney

"Schiltz, Patrick J." To: 'McCabe Peter ([email protected])"<PJSCHILTZ@sttho <[email protected]>mas.edu> cc: 'Cooper Edward ([email protected])'" <[email protected]>,10/15/2003 09:48 AM "'Rabiej John ([email protected])' <[email protected]

"'Ishida James ([email protected])"'<[email protected]>Subject: Comment on Proposed Amendment to Civil Rule 6(e)

Dear Peter,

At the invitation of Ed Cooper, I submit this comment on the proposed amendment to Civil Rule 6(e).

I believe that the proposed amendment is sound and should be approved, but I recommend that languagebe added to the Committee Note to make certain that there is no ambiguity regarding the followingsituation: A paper is served by mail. The prescribed period is 30 days. The 30th day falls on aSaturday. Are the three days counted beginning on that Saturday - thus making the paper due onTuesday - or are the three days counted beginning on Monday (when the prescribed period wouldexpire under the time calculation provisions of the Civil Rules, in the absence of the three-dayextension) - thus making the paper due on Thursday? Rule 6(e) is not entirely clear on this point.

In the Committee Note that I drafted for the proposed amendment to Appellate Rule 26(c) (whichproposed amendment and Note have not, as of this writing, been approved by the Appellate RulesCommittee), I described the operation of the proposed amendment as follows:

"Under the amendment, a party that is required or permitted to act within a prescribed period should firstcalculate that period, without reference to the 3-day extension provided by Rule 26(c), but with referenceto the other time computation provisions of the Appellate Rules. (For example, if the prescribed periodis less than 11 days, the party should exclude intermediate Saturdays, Sundays, and legal holidays, asinstructed by Rule 26(a)(2).) After the party has identified the date on which the prescribed periodwould expire but for the operation of Rule 26(c), the party should add 3 calendar days. The party mustact by the third day of the extension, unless that day is a Saturday, Sunday, or legal holiday, in whichcase the party must act by the next day that is not a Saturday, Sunday, or legal holiday."

I also included the following example in the Note:

"To illustrate further: A paper is served by mail on Thursday, August 11, 2005. The prescribed time torespond is 30 days. Whether or not there are intervening legal holidays, the prescribed period ends onMonday, September 12 (because the 30th day falls on a Saturday, the prescribed period extends to thefollowing Monday). Under Rule 26(c), three calendar days are added - Tuesday, Wednesday, andThursday- and thus the response is due on Thursday, September 15, 2005."

I recommend that the Civil Rules Committee add similar language -- and perhaps a similar example -- tothe Note to the proposed amendment to Civil Rule 6(e).

Sincerely,Patrick Schiltz

Prof. Patrick J. SchiltzSt. Thomas More Chair in LawUniversity of St. Thomas School of Law1000 LaSalle Avenue -- MSL 400Minneapolis, MN 55403-2015

Phone: (651) 962-4896Fax: (651) 962-4881E-mail: pj schiltzO)stthomas.edu

S. CHRISTOPHER SLATTEN7631 TAMPA WAY

SHREVEPORT, LOUISIANA 03-CV- 007

Tel: (318) 676-3265 Fax: (318) 676-3274December 11, 2003

Peter G. McCabeSecretary, Committee on Rules of Practice and ProcedureAdministrative Office of the U. S. CourtsWashington, DC 20544

Re: Proposed Amendment to F.R.C.P. 6(e)

Dear Secretary McCabe:

I write to offer comments and suggestions about the proposed revision of Federal Rule ofCivil Procedure 6(e). The proposed revision attempts to remove ambiguity from the rule, but I fearit does not quite get the job done in one respect. I suggest the addition of one word - calendar -to describe the additional three-dayperiod granted bythe rule. That simple change, already employedin the rule's F.R.A.P. counterpart, will remove all doubt on a nagging issue.

As proposed, the rule would read as follows:

,"Whenever a party must or may act within a prescribed period after service andservice is made under Rule 5(b)(2)(B), (C), or (D), 3 days are added after the period."

The ambiguity about which I am writing stems from Rule 6(a)'s command that when a period oftimeprescribed by rule or order is less than 11 days, onlybusiness days are included in the computation;if the period is 11 days or more, all calendar days are counted. The intersection of Rules 6(a) and6(e) results in three possible interpretations when the prescribedperiod is 10 days or less. A commonsituation in which the intersection is encountered is when a party must file his objections to amagistrate judge's report and recommendation within 10 days "after being served with a copy" ofthe recommendation. See 28 U.S.C. § 636(b)(1) and F.R.C.P. 72(b).

Some argue that when the 3-day mail rule is applicable to a 10-day period, the deadline iscalculated by counting 10 business days plus 3 business days (because each of the two periods is lessthan 11 days). Others urge that three calendar days are added to the 10business day period. A third(minority) view contends that a total of 13 days are now available and, because that is a period of11 days or more, a count of 13 calendar days establishes the deadline. See 4B Wright & Miller,Federal`Practice and Procedure: Civil 3d § 1171 (2002) and ,'aquillas Ranch Co., Ltd. v. TexacoExploration and Production, Inc., 844 F.Supp. 1156 (S.D. Tex. -1994).

The text of the proposed revision squarely defeats the third argument by clarifying that thethree days are added "after" the prescribed period. (The current rule says the three days are added"to" the prescribed period.) That change also appears to eliminate a related debate about whether the

December 11, 2003Page 2

three-day period is counted before or after the prescribed period is calculated. See Kruger v. Apfel,25 F.Supp.2d 937 (E.D. Wis. 1998), vacated on other grounds, 214 F.3d 784 (7th Cir. 2000). Therevision would not, however, make clear which of the first two options is correct. Are the "3 days

added after the period" business or calendar days?

The Committee Note that follows the proposed revision provides an example that indicatesthe drafters intend the additional three-day period to be calendar days. In the example, a paper ismailed on Wednesday and the prescribed time to respond is 10 days. Assuming there are nointervening legal holidays, the prescribed period ends on Wednesday two weeks later. Three daysare added, expiring on the following Saturday. The deadline is, therefore, the next business day,Monday. This example plainly indicates the three extra days are intended to be calendar days. I note,however, that the same Monday result would apply in the example even if the three-day period werebusiness days. (Thursday, Friday and Monday).

Perhaps the Committee's example is sufficient to convince attorneys and judges that the ruleis "10-business days plus three calendar days" when Rule 6(e) applies, but there is certainly roomfor doubt given Rule 6(a)'s indication that a three-day period means three business days. Given thatpotential for doubt, it would be preferable if the rule itself were clear on this important issue.

I suggest the Committee adopt thq approach to this issue taken in F.R.A.P. 26(c). That rulespecifies that when a party must act within a prescribed period following service, he gets an extra"3 calendar days". I. suggest the word "calendar" also be inserted in F.R.C.P. 6(e) to avoidunnecessary ambiguity and keep the federal rules consistent in this regard. The Committee may alsowish to consider proposing an amendment to Federal Rule of Criminal Procedure Article 45(e) toresolve the same ambiguity that resides in that rule.

The simple addition of the word "calendar" to describe the additional 3-dayperiod will avoidcountless hours of wasted- research by attorneys, judges and law clerks, will prevent numeroustelephone calls to judge's chambers to ascertain deadlines, and may even prevent claims of legalmalpractice based on a lawyer's incorrect guess at the interpretation of an ambiguous rule.

Thank you.for your attention to these matters. I applaud the proposed clarification of Rule6(e) and ask that you consider making this additional point of clarity during the process.

truly,

Chris Slatten

Nobody To: [email protected]<[email protected]. cc:dcn> Subject: Submission from hftp:/lwww.uscourts.govlruies/submit.html

02/05/2004 02:47 PM

Salutation: 03-CV-o0 03-AP-3YfFirst: JosephMI: GLast: Scoville

Org: Courts O3-CR-&$0State Bar of Michigan, Committee on United States " "Courts

MailingAddressl: Michael Frank BuildingMailingAddress2: 306 Townsend StCity: LansingState: MichiganZIP: 48933-2083EmailAddress: [email protected]: (616) 456-2309Fax:Appellate: YesCivilRules: YesComments:

February 5,2004

Peter G. McCabe, SecretaryCommittee on Rules ofPractice and Procedure

of the Judicial Conference of theUnited StatesThurgood Marshall Federal JudiciaryBuildingWashington DC 20544

Re: Comments on Proposed Amendments toCivil and Appellate Rules

Dear Mr. McCabe:

I amwriting as the chair of the State Bar of Michigan,Committee on the United States Courts ("U.S. CourtsCommittee"), to convey the Committee's comments on certainproposed amendments to the Civil and Appellate rules,published in August 2003. The U.S. Courts Committee is astanding committee of the State Bar of Michigan composed ofpractitioners and judges from both the Eastern and WesternDistricts of Michigan. The charge of the U.S. CourtsCommittee is "to concern itself with the administration,organization and operation of the United States Courts for thepurp6se of securing the effective administration ofjustice." In furtherance of this purpose, the U.S. CourtsCommittee has commented periodically on proposed amendmentsto the Federal Rules of Practice and Procedure,

focusing especially on the effect of proposed amendmentsfrom the practitioners' viewpoint. The commentssubmitted herein were approved at the Committee's meeting ofDecember 9, 2003, and represent only the views of theCommittee and not those of the State Bar of Michigan or itsBoard of Commissioners or RepresentativeAssembly.

Rules of Civil Procedure

Rule 5.1, ConstitutionalChallenge to Statute - Notice and Certification; Rule 24(c),Intervention, Procedure. The proposal requires a party to givenotice to the US or state attorney general when a filingquestions the constitutionality of a federal or state law.The requirement is moved from Rule 24(c) to a new Rule5.1. The rule is based on the requirement in 28 U.S.C.§ 2403 for the court to certify such challenges tothe attorney general and permit the attorney generalto intervene.

The proposed amendment adds arequirement that a party not only "call the attention of the

,iiiw court" to the existence of such a challenge (present Rule24(c)), but that the party also serve the attorneygeneral. This is in addition to the court's notice to theattorney general. The proposal also adds a requirement forthe court to set a deadline for the attorney generalto intervene.

We recommend the following:

(a) Theword "sued" should be deleted from proposed Rule5.1(a) (1) and (a) (2), so that they read,respectively:

(1) if the question addresses an Act of Congress andno party is the United States, a United Statesagency, or an officer or employee of the United Statessued in an official capacity

(2) if the questionaddresses a state statute and no party is the state or astate officer, agency, or employee sued in an officialcapacity

As proposed, the rule would require notice when agovernmental Qfficer or employee is a plaintiff in an officialcapacity and a constitutional issue is raised, since, inthat case, the officer is not "sued in an officialcapacity." The notice requirement should not apply in such acase, since the attorney general presumably representsan officer or employee suing in an official capacity.

Dropping the word "sued" would limit the scope ofthe rule to cases where there is no governmental partyor officer, either as a plaintiff or defendant. Fed.R. App. P. 44, a similar rule requiring notice ofconstitutional issues in the court of appeals, applies when an

agency, officer, or employee "is not a party in anofficial capacity" rather than "is not sued in an officialcapacity." Rule 5.1 should parallel the language of Fed. R.App. P. 44.

(b) The provisions in proposed Rules5.1(a) (1) (B) and (a) (2) (B) requiring a party to serve notice onthe attorney general should, be deleted. Thisadditional obligation on the party, not required by 28 U.S.C.§ 2403, duplicates the court's certification of theissue to the attorney general under proposed Rule5.1(b), a certification that the statute requires. Thereis no justification for placing a 'duplicativeobligation on a party. Fed. R. App. P. 44, the correspondingappellate rule, does not require a party to serve notice butleaves it to the clerk to do so.

The advisorycommittee's report states that the "dual-notice requirementwas drafted because the Department of Justice wishesto make quite sure that notice comes to its attentionin timely fashion." We do not see why the court'scertification would not provide timely notice, since the courtpresumably will give notice promptly after a party's filingof a notice of constitutional question under proposedRule 5.1(a) (1) (A) or (a) (2) (A).,

(c) If the advisorycommittee nonetheless decides to retain the provisionrequiring a party to serve notice, we recommend thatproposed Rule 5.1(a) (2) (B) be revised to specify the mannerof service on a state attorney general. Rule5.1(a) (1) (B), by reference to Rule 4(i) (1) (B), specifies thatservice on the US attorney general is by registered orcertified mail. The same method of service should be usedfor service on a state attorney general. We recommendthat the phrase "by sending copies by registered orcertified mail" be added to the end of Rule5(a) (2)(B).

Rule 6(e), Additional Time After Certain Kinds ofService. Before commenting on the specific amendmentproposed to Rule 6, we take this opportunity to advocate acomplete overhaul of the methods of computing time setforth in the Federal Rules. It should now be clear thatthe computation of time under the Federal Rules hasbecome unduly complicated and that ambiguities willremain, even after adoption of the amendment. For thisreason, we strongly suggest that the Standing Committeereexamine the entire question of computation of time underthe Civil, Criminal and Appellate Rules. We support asingle method of Computing time, applicable to all trialand appellate proceedings, based upon running timetied to a calendar week or multiples thereof. The onlyexception to the rule would arise when the last day of theperiod falls on a weekend or holiday. We are aware ofseveral state systems that have adopted this method,including the State of Michigan. See Mich. Ct. R.1.108.

We turn now to the proposed amendment, which deals

with an ambiguity in the current rule for the extensionof a prescribed period of time by 3 days when serviceis by mail, by leaving a copy with the clerk for a

-person with no'known mailing address, or by otherconsented means. The rule clarifies that the 3 days isadded after the prescribed period of time, instead ofbefore the period. The distinction makes a difference,as set out in the advisory committee's report. Theamendment also clarifies that the 3 days is added "after theperiod" rather than added "to" the period. \1

FN1. This makes a difference, for example, for a10-day period. If 3 days are added "to" the period, itbecomes a 13-day period and the exclusion of interveningweekends and holidays under Rule 6(a) does not apply.Adding the 3 days "after thd period" preserves theexclusion of intervening weekends and holidays from the10-day period and then adds the 3 days after computationof the period.

This amendment is desirable but doesnot address two other ambiguities in counting days.First is the question of whether the 3 days added underRule 6(e) is itself a "period of time" under Rule 6(a)from which intervening weekends and holidays must beexcluded. E.D. Mich. LR 6.1(b) addresses this by statingthat the additional 3 days is "three consecutivecalendar days." Although the advisory committee's reportsays that treating the 3 days as a separate period "canbe rejected without regret," the proposed rule itselfdoes not clearly exclude it. We recommend that therule address this by modifying the last phrase in therule to state "3 consecutive calendar days are addedafter the period."

The second ambiguity that-should beaddressed is how to apply the provision in Rule 6(a)extending the time pefiod when the last day of the periodfalls on a weekend or holiday. Should that be appliedbefore or after adding the 3 days under Rule 6(e)? E.D.Mich. LR 6.1 resolves this by specifying that the 3 daysare added first and then, if the period as extended by3 days ends on a weekend or holiday, the Rule 6(a)extension applies. We recommend that the following languagebe added: "The 3 days must be added beforedetermining whether the last day of the period falls on a daythat requires extension under Rule 6(a)."

The sameproblems addressed by the proposed amendment and ourcomments above arise under Fed. R. Crim. P. 45 and Fed. R.App. P. 26, the criminal and appellate counterparts toFed. R. Civ. P. 6. Whatever amendments are proposedfor the civil rules, there should be consistentamendments to the criminal and appellate rules.

Rules ofAppellate Procedure

New Rule 32.1, Citation of Unpublished

Opinions. This new rule would require courts to permit thecitation of judicial opinions, orders, judgments or otherwritten dispositions that have been designated asunpublished, non-precedential or the like. New Rule 32.1 wouldalso require parties who cite unpublished ornon-precedential opinions that are not available on a publiclyaccessible electronic database (such as Westlaw) to providecopies of those opinions to the court and to the otherparties. The proposed rule does not address theprecendential value that appellate courts must give tounpublished opinions.

The current local rules of somefederal appellate courts abjuring the precedential valueof their own unpublished opinions raises a troublingand controversial issue, and we agree with thecriticisms of that practice set forth in the AdvisoryCommittee note. For this reason, we would prefer that theproposed rule resolve this question completely byabolishing such restrictions. Nevertheless, we think thatthe proposed rule is a step in the right direction, asit will at eliminate local rules that restrictcitation to unpublished authorities, such as 6 Cir.R.28(g), and thereby bring uniformity among the Circuitsand eliminate the threat of sanctions against thosewho transgress those local rules.

We appreciate theopportunity to comment on these proposed ruleamendments.

Verytruly yours,

/s/

Joseph G.Scoville

Chair, Committee on U.S Courts

StateBar ofMichigan

submit2: Submit Comment---- -------------------------------------------------------------------HTTP Referer: http://www.uscourts.gov/rules/submit.htmlHTTP User Agent: Mozilla/4.0 (compatible; MSIE 6.0; Windows NT 5.0; .NET CLR1.0.3705)Remote Host:Remote Address: 10.213.100.125---- -------------------------------------------------------------------

FEB-13-2004 18:18 CIVIL DIVISON FP 202 307 0449 P.02

U. S. Department of Justice

Civil Division

O00m/i of JA# Me WI- Autmtoey General Walahton, D.C. 20530

February 13, 03-CV-

Peter G. McCabeSecretary of the Committee on Rules of Practice and ProcedureAdministrative Office of thq United States CourtsWashington, DC 20544

Dear Mr, McCabe:

The United States Depattinent of Justice appreciates this opportunity to comment on Proposed(New) Federal Rule of Civil Procedure ("FRCP") 5.1 and the proposed amendments to FRCP 6(e).As the nation's principal litigator in the Federal courts, the Department has a strong and long-standinginterest in participating in the rules amendment process. The Department takes particular interest inProposed FRCP 5.1 as it seeks to implement the unique role of the Attorney General to defend Acts ofCongress from constitutional challange. The Department was directly involved in the drafting andshaping of the proposal from the outset, and we welcome this opportunity to express our strong supportfor the final proposal.

Proposed PROP 5,1

Proposed FRCP 5.1 requires a party challenging the constitutionality of a statute in a non-government case to file a notice of constitutional challenge and serve a copy of the notice on theAttorney General. I The proposal implements the provisions of 28 U.S.C. § 2403, which provide thatcourts shall certify constitutional challenges to Acts of Congress to the Attorney General and permit theUnited States to intervene in the actions. Presently, the third sentence of FRCP 24 implements thecertification requirement of § 2403, but there have been many instances in which the Attorney Generalhas not been provided with notice of constitutional challenges or has received informal notice at a latestage of a proceeding. Thus, the Department's primary purpose in supporting this proposal has been toincrease the prospect that the Attarney General will receive notice in a timely manner. Each provisionof thc proposal is meant to serve this end.

Proposed FRCP 5. I also requires parties to notice the relevant State Attorney Genera) whenthe constitutionality of state statutes are drawn into questioni. Although the Dopmatment has framed itscomments around the rule's provisions that apply to constitutional challenges to Acts of Congress, ourcomments apply equally to the state statute provisions.

FEB-13-2004 18:18 CIVIL DIVISON FP 202 30? 0449 P.03

-2-

Proposed FRCP 5-1 does not alter the courts' statutory duty to certify a constitutionalchallenge under § 2403. Nonetheless, it is the Department's position that requiring notice from both theparty challenging thestatute and from the court will ensure that the Attorney General is made aware ofconstitutional challenges in a timely manner.' In response to any concern that the dual noticerequirement creates an additional burden on the challenging party, it should be noted that FRCP 24(c)already imposes a duty on the challenging party to "call the attention of the court to its consequentialduty" to certify the constitutional challenge. In addition, many district courts have imposed similar dutieson challenging parties through local court rules? To the extent that the; proposal imposes the actualnotice requirement directly on the patty raising the challenge, it thereby reduces the initial burden on thecourts and the cleriks to identify cases in which certification under § 2403 is appropriate.

Cases in Which the New Rule Would Avgy. Proposed FRCP 5.1 would apply in any case inwhich no party is the United States, a federal agency, or an officer or employee of the United Statessued in an official capacity. Thus, it would apply even when oae of the parties is a federal official suedin an individual capacity for acts and omissions occurring in connection with the performance of dutieson behalf of the United States, Although the Department represents some officials sued in theirindividual capacities, these officials are sometimes represented by private counsel, Therefore, theDepartment supports the requirement of filing and serving notices in this subset of cases involvingfederal officials sued in their individual capacities.

Proposed FRCP 5.1 also provides that notice should be made when a party challenges an "Actof Congress." This term mirrors the term used in § 2403. The Department understands "Act ofCongress" to encompass, at the least, all federal statutes, including joint resolutions. Moreover,although FRCP 24(c) applies when an Act of Congress that affects the public interest is challenged, theRule would apply when mny Act of Congress is challenged. It is the Department's belief that theAttorney General is in the best position to determine in the first instance whether an Act affects thepublic interest. A reviewing court can always disagree.

Time for Intervention/Stay of Proceedings Pending Anpearance of the Atto-rny GenralProposed FRCP 5.1 requires that a court set a time to intervene for the Attorney General of not lessthan 60 days from the date of certification. The Department proposed that the Attorney General haveat least a 60-day window to intervene in recognition of the Department's internal administrative

2 In instances in which a court su_ jp•_t raises a constitutional challenge, the certificationrequirement of § 2403 will remain the only vehicle for notice to the Attorney CGeneral.

%l5 • _,. S.D. Cal. 24.1; E.D. Cal. 24-133; N.D. Cal. 3-8; N.D. Ind. 24.1; S.D. Ind. 24.1;N.D. Iowa 24.1; S.D, Iowa 24.1; D. Ken. 24.1; M.D.N.C. 83.7; N.D. Okla. 24.1; 1). Ore. 10.5;E.D. Wash. 24.1.

FEB-13-2004 18:18 CIVIL DIVISON FP 202 307 0449 P.04

-3-procedures that must be followed upon receipt of a notice.4 These procedures include securing theSolicitor General's approval for intervantion umder 28 C.F.XR § 0.21. The Department nonethelessblieves that the Rule does nothing to restrict the ability of the Attorney General to intervene under §2403 in an action at any time. To clarify this important point, we suggest the inclusion of the followingtext in the Advisory Committee's Note:

Nothing in this Rule shall be interpreted as restricting the ability of the Attorney Generalor his designee to intervene in an action more than 60 days after service of the noticeor, in the event that there is noncompliance with this Rule, after a final order orjudgment issues.

The proposed Committee Note does indicate that a court need not stay a case pending aresponse from the Attorney Gnceral. It suggests, however, that the court not make a final (as opposedto preliminar-y) determination sustaining a constitutional challenge before the 60 days (or whateverlonger period is set by the court) for intervention has elapsed. The Note also reminds courts that a stayof proceedings might avoid a second round of briefing or a second hearing on the constitutionalchallenge should the Attorney General decide to intervene. The proposal, however, does not restrict acourt's ability to reject a constitutional challenge.at any time, even before notice and certification to theAttorney General. It is foreseeable that a district court will want the discretion to dismiss frivolouschallenges to Acts of Congress without providing notice. The Department believes that providing theAttorney General with at least 60 days to intervene while leaving to the court the decision of whether tostay the proceedings or dismiss the challenge outright achieves the proper balance between ensuringthat the Attorney General has an opportunity to intervene and avoiding any unnecessary delay.

Manner of Serirn the Notice. Proposed FRCP 5,1 would require service of the notice on theAttorney General in the mannerprovided by FRCP 4(iXl)(B), which is by registered or certified mailto the Attorney General of the United States at Washington, District of Columbia. The Department hasconsidered various other methods for service, but has determined that service in the same manner that itreceives complaints will best ensure timely and proper processing of notices.

The proposal also requires that the notice to the Attorney General include a copy of thepleading, motion, or paper raising the consitutional challenge. The Department believes strongly thatbecause of the short time frame for the Attorney General to respond to 5.1 notices, it is important thatthe Department receive the paper raising the challenge as early as possible in order to analyze thechallenge and decide whether to intervcnc. Requiring its inclusion with the notice will eliminate theadded time necessary to obtain a copy of the relevant'pleading and thus will serve to prevent any

" The 60-day period mirrors the federal government's time to respond to complaints underFRCP 12(a)(3) and the federal government's time to file notices of appeal in Federal Rule of AppellateProcedure 4(a)(1)(B).

FEB-13-2004 18:19 CIVIL DIVISON FP 282 30? 0449 P.05

-4-

unnecessary delay in the court proccedings.

No Forfeitur. Proposed FRCP 5.1 carries forward similar text from FRCP 24(c) that the

failure to file and send a notice does not forfeit a constitutional right.Comparison with Parallel Appellate Rule4. Proposed FRCP 5.1 is a departure from Federal

Rule of Appellate Procedure 44. The Department deems such a dparture justified due to theimportance of the government's presence as a party in district court, where the factua record is madeand constitutional arguments are developed. It also has been our experience that notification to theAttorney General under Appellate Rule 44 functions more smoothly given the nature of the appealsproccss and the centralized circuit court structure.

The Department strongly supports the enactment of Proposed FRCP 5.1 in its present formwith one addition, as mentioned above, to the Advisory Committee's Note.

FRCP -Th

The Department supports the Committe's proposal to clarify FRCP 6(c), Our one suggestionis to change "3 days are added after the period" to "3 endar days are added after the period." Webelieve this addition will make absolutely clear the Committee's intention that parties include weekendsand holidays when counting the three extra days.

We thank the Committee for this opportunity to share our views. If you have any furtherquestions or if there is anything the Department can do to assist the Committee in its important work,please do not hesitate to cdntact me.

Sincerely,

PeterD. Keisler-Assistant Attorney GeneralCivil Division

TOTRL P.05

MEMORANDUM



RE: NATIONAL CREDITOR NOTICING RULES

The pending bankruptcy reform legislation includes a provision that is intended to create

a national creditor noticing system to reduce costs and increase efficiency for creditors who are

involved in a substantial number of cases nationwide. The legislation essentially would permit a

creditor to register with any bankruptcy court to have notices sent to the creditor at the address

submitted to the court. This system could create a number of problems, and the Technology

Subcommittee, chaired by Judge Zilly, discussed and considered a variety of proposed rules

changes to implement the legislation either in the form set out in section 315 of the reform

legislation, or in some other form that still would permit national noticing of creditors but that

might be more effective than the legislative proposal. After lengthy discussion, the

Subcommittee was split as to whether a rules amendment is currently necessary. The

Subcommittee instead offers the following reasons for not seeking to amend Rule 2002(g), and

the Subcommittee further concluded that if the Committee believes that an amendment should be

adopted, the form of that amendment should be as set out below.

During the period of the Subcommittee's consideration of proposed amendments to Rule

2002(g), the Director of the Administrative Office announced enhancements to the Electronic

Bankruptcy Noticing National Creditor Registration Service. A copy of the Director's

memorandum and a description of the service is included in the materials immediately after this

memorandum. The program appears to accomplish much of what the proposed amendments to

1

Rule 2002(g) are intended to do. Creditors will deal primarily with the Bankruptcy Noticing

Center ("BNC") to establish the noticing mechanism. It can be done on a national basis without

the need to have contracts filed with each court. Notices can be sent through an Electronic Data

Interchange, by fax, or by email. Since most creditors who are likely to participate in a national

creditor registry will prefer electronic noticing, the program may well operate to provide a

noticing service for national creditors that meets their needs and obviates the need for a rules

amendment at this time.

Notwithstanding apparent support for the program, it does not solve the problem for all

national creditors. Some creditors apparently do not currently receive their notices through

electronic means. Issues of computer compatibility and the costs that some companies do not

want to incur to become electronically compatible results in some creditors being ineligible for

the new National Creditor Registration Service. Therefore, the Subcommittee concluded that it

may still be wise to propose a rules amendment to address the issue for those creditors who do

not participate in the electronic noticing program as well as to improve the rules generally to

make national noticing possible directly under the rules without reliance on a program of the

BNC. Thus, the Subcommittee considered the reform legislation version of such a rule as well as

other rules amendments to accomplish the goal of national creditor noticing in cases under

chapters 7 and 13.

In addition to the reform act type of provision, the Subcommittee considered amendments

to Rule 2002(g) that would have permitted creditors to register their address or addresses with a

bankruptcy court leaving to the court the task of making sure that the entities sending notices to

the creditor would be aware of the creditor's registered address. Concern about the burden on

2

clerks' offices and the potential for significant overlap of efforts led the Subcommittee to reject

a system that would permit creditors to register with a court and have the court then take the

action to ensure that notices in all bankruptcy cases throughout the country were sent to the

creditor at the registered address. Rather, the Subcommittee recommends that if the Committee

wishes to pursue an amendment to Rule 2002(g) that it should be one that permits the creditor

and a Notice Provider to reach their own agreement on the method and manner of service without

the court having to monitor the process. The creditor and Notice Provider agree on the manner

of service and the address to which the notices must be sent, and the notice is thereafter

conclusively presumed to have been sent to the correct address.

The Subcommittee was evenly split as to whether to recommend that the Committee take

no action on the proposed amendments to Rule 2002(g) given the status of the BNC National

Creditor Registration Service or whether to proceed with a rules amendment given that rules

changes take three years to become effective, and if the concept of a national creditor noticing

system is sensible, then the Committee should undertake to recommend appropriate rules

changes that can be in the works as the Committee continues to monitor developments under the

BNC system. Thus, it is left to the Committee to decide whether to proceed with an amendment

to Rule 2002(g) to be published for comment and eventually recommended to the Standing

Committee for its approval.

The recommended version of Rules 2002(g) and 9001 provides that a Notice Provider

and any interested entity may agree to the manner of the notice and the address to which a notice

must be sent whenever the court directs the Notice Provider to give notices. This avoids the need

for any filing with the court and the concomitant burden on the clerk's office to manage that

3

information not just for the court in which the filing is made, but for all courts in the bankruptcy

system. The proposed version of Rule 2002(g) as set out below leaves these matters to the

Notice Provider and the entity that agrees to receive the notices from the Notice Provider. The

rule further provides that if the Notice Provider uses the address supplied by the entity receiving

the notice, then the address is conclusively presumed to be proper. The Subcommittee rejected

language that would have provided that the use of the address supplied by the entity made the

notice conclusively presumed to be effective. If the Committee believes that an amendments

should be proposed, the Subcommittee's recommended version of such amendments to Rules

2002(g) and 9001 is set out below.

RULE 2002. Notices to Creditors, Equity Security Holders,

United States, and United States Trustee

1

2 (g) ADDRESSING NOTICES

3 (1) Notwithstanding subparts (2) - (4), in a case under

4 chapter 7 or 13, an entity and a Notice Provider may agree that

5 when the Notice Provider is directed by the court to give notice. the

6 Notice Provider shall give the notice to the entity in the manner

7 agreed to and at the address or addresses the entity supplies to the

8 Notice Provider. The address supplied by the entity is conclusively

9 presumed to be the proper address for the notice for purposes of

10 this subdivision. Failure of the Notice Provider to use the supplied

4

II address does not invalidate any notice that is otherwise effective

12 under applicable law.

13 Q.) (+-) Notices required to be mailed under Rule 2002 to a

14 creditor, indenture trustee, or equity security holder shall be

15 addressed as such entity or an authorized agent has directed in its

16 last request filed in the particular case. For purposes of this

17 subdivision -

18 (A) a proof of claim filed by a creditor or indenture

19 trustee that designates a mailing address constitutes a filed request

20 to mail notices to that address, unless a notice of no dividend has

21 been given under Rule 2002(e) and a later notice of possible

22 dividend under Rule 3002(c)(5) has not been given; and

23 (B) a proof of interest filed by an equity security

24 holder that designates a mailing address constitutes a filed request

25 to mail notices to that address.

26 (M) Mj If a creditor or indenture trustee has not filed a

27 request designating a mailing address under Rule 2002(g)(-) (2),

28 the notices shall be mailed to the address shown on the list of

29 creditors or schedule of liabilities, whichever is filed later. If an

30 equity security holder has not filed a request designating a mailing

31 address under Rule 2002(g)(-) (2), the notices shall be mailed to

32 the address shown on the list of equity security holders.

5

33 (3) f4) If a list or schedule filed under Rule 1007 includes

34 the name and address of a legal representative of an infant or an

35 incompetent person, and a person other than that representative

36 files a request or proof of claim designating a name and mailing

37 address that differs from the name and mailing address of the

38 representative included in the list or schedule, unless the court

39 orders otherwise, notices under Rule 2002 shall be mailed to the

40 representative included in the list or schedules and to the name and

41 address designated in the request or proof of claim.

COMMITTEE NOTE

A new subdivision (g)(1) is inserted in the rule, and the

former subdivisions are renumbers (2) through (4). The new

subdivision authorizes an entity and a Notice Provider to agree that

the Notice Provider will give notices to the entity at the address or

addresses set out in their agreement. Rule 9001(9) sets out the

definition of a Notice Provider.

The business of many entities is national in scope, and

technology currently exists to direct the transmission of notice

(both electronically and in paper form) to those entities in an

accurate and much more efficient manner than by sending

individual notices to the same creditor by separate mailings. The

rule authorizes an entity and a Notice Provider to determine the

manner of the service as well as to set the address or addresses to

which the notices must be sent. For example, a they could agree

that all notices to the entity must be sent to a single, nationwide

electronic or postal address. They could also establish local or

regional addresses to which notices would be sent in matters

pending in specific districts. Since the entity and Notice Provider

also can agree on the date of the commencement of service under

the agreement, there is no need to set a date in the rule after which

notices would have to be sent to the address or addresses that the

entity establishes. Furthermore, since the entity supplies the

6

address to the Notice Provider, use of that address is conclusively

presumed to be proper. Nonetheless, if that address is not used, the

notice still may be effective if the notice is otherwise effective

under applicable law. This is the same treatment given under Rule

5003(e) to notices sent to governmental units at addresses other

than those set out in that register of addresses.

The rule applies only in chapter 7 and 13 cases. It is in

those cases that the volume of notices and the recurrent

participation by specific entities in those cases make the Notice

Provider agreements efficient.

The remaining subdivisions of Rule 2002(g) continue to

govern the address for notices for any entity that does not enter into

an agreement with a Notice Provider.

1 RULE 9001. GENERAL DEFINITIONS

2

3 (9) "Notice Provider" means any entity approved by the

4 Administrative Office of the United States Courts to give notice to

5 creditors under Rule 2002(g)(1).

6 1(.) (9) "Regular associate" means any attorney regularly

7 employed by, associated with, or counsel to an individual or

8 firm.

9 (1l ("0) "Trustee" includes a debtor in possession in a

10 chapter 11 case.

11 ( (--1-) "United States trustee" includes an assistant

12 United States trustee and any designee of the United States trustee.

7

COMMITTEE NOTE

The rule is amended to add the definition of a Notice

Provider and to renumber the final three definitions in the rule. A

Notice Provider is an entity approved by the Administrative Office

of the United States Courts to enter into agreements with entities to

give notice to those entities in the form and manner agreed to by

those parties. The new definition supports the amendment to Rule

2002(g)(1) that authorizes a Notice Provider to give notices under

Rule 2002.

Many entities conduct business on a national scale and

receive vast numbers of notices in bankruptcy cases throughout the

country. Those entities can agree with a Notice Provider to receive

their notices in a form and at an address or addresses that the

creditor and Notice Provider agree upon. There are processes

currently in use that provide substantial assurance that notices are

not misdirected. Any Notice Provider would have to demonstrate

to the Administrative Office of the United States Courts that it

could provide the service in a manner that ensures the proper

delivery of notice to creditors. Once the Administrative Office of

the United States Courts approves the Notice Provider to enter into

agreements with creditors, those parties can establish the

relationship that will govern the delivery of notices in cases under

chapters 7 and 13 as provided in Rule 2002(g)(1).

8

LEONIDAS RALPH MECHAM ADMINISTRATIVE OFFICE OF THEDirector

UNITED STATES COURTSCLARENCE A LEE, JR.

Associate Director WASHINGTON, D.C. 20544

November 24, 2003

MEMORANDUM TO ALL CLERKS, UNITED STATES BANKRUPTCY COURTS

Subject: Electronic Bankruptcy Noticing National Creditor Registration Service andUpdated Web Site (INFORMATION)

I am pleased to announce enhancements to the Electronic Bankruptcy Noticing (EBN)program that will eliminate the need for clerk's office personnel to administer program-relatedpaperwork while increasing the efficiency of national court noticing operations. Effectiveimmediately, the Bankruptcy Noticing Center (BNC) will support a National CreditorRegistration Service (NCRS) for electronic noticing. This service is being provided inconjunction with the launch of an updated, user-friendly EBN program web site.

The NCRS is offered based upon a recommendation by, and developed in closecoordination with, the Bankruptcy Noticing Working Group. The new service provides thefollowing benefits:

" Allows national noticing partners to sign-up for Electronic Data Interchange (EDI)services directly with the BNC.

* Eliminates the courts' local administrative burden of reviewing, mailing andmaintaining copies of voluminous Trading Partner Agreements, Evidence ofAuthority forms, synonym name and address lists, court form samples, and other EBNdocuments.

" Eliminates the courts' burden of sending a package of form examples to each EDInoticing partner. The BNC will create a central electronic repository of all courtforms for reference by noticing partners.

" Provides an easy-to-use web-based interface for noticing partners to prepare noticingagreements on-line.

" Allows current and new noticing partners to reduce the volume of EBNdocumentation required to initiate or change electronic noticing services.

A TRADITION OF SERVICE TO THE FEDERAL JUDICIARY

Electronic Bankruptcy Noticing National Creditor Registration Service and 2Updated Web Site

" Provides more efficient service at lower costs, which will have the additional benefitof boosting EBN program participation.

" Provides clerk's office staff the ability to monitor trading partner activity at the BNCIntranet ( http://www.noticingcenter.com ).

The EBN noticing partner agreements and related forms have been updated and areposted on-line at http://www.EBNuscourts.com. All other aspects of the EBN program willremain unchanged. The Bankruptcy Court Administration Division will contact you shortly toconfirm the court's intent to use the new registration service. BNC staff will coordinate withyour office the posting of the court's standard notices supported by the EDI service on its webpage. A document prepared by the BNC contractor, BAE Systems, is attached that provides asummary of major changes to the EBN program website.

Should you have any questions about these new services, please contact Gary McCaffrey,EBN Product Administrator at the AO's Bankruptcy Court Administration Division at (202) 502-1540, or by e-mail at Gary McCaffrey/DCA/AO/USCOURTS.

Leonidas Ralph Mecham

cc: Chief Judges, U.S. Bankruptcy Courts

Attachment

ATTACHMENT

Electronic Bankruptcy NoticingNational Creditor Registration Service

AndUpdated Web Site

Overview

The Electronic Bankruptcy Noticing (EBN) website has been redesigned to guide visitors seamlesslythrough the process of obtaining EBN services with the goal of facilitating:

* Online sign up of noticing partners* National EBN registration

The organization of information has been enhanced to provide a clear overall picture of the websiteas a whole and facilitates navigation between website levels. The main site menu provides fast andeasy reference to major site sections:

* Sign Up* Central Forms Repository* Documentation

Centralized Sign-Up

The new National Creditor Registration Service (NCRS) expands the services offered by the BNCfor handling EBN E-mail and FAX noticing agreements to include Electronic Data Interchange (EDI)Trading Partner Agreements and Evidence of Authority forms, virtually eliminating all paperhandling and review functions by the court. All bankruptcy courts will be contacted to confirm thecourt's intent to use the new registration service. The BNC will maintain a database denoting courtsthat elect to use the NCRS, and courts that retain local responsibility, for all EBN services. Noticingpartners for courts that elect to use the NCRS will be activated for EBN by sending the BNC a singlenoticing partner agreement and, if required, evidence of authority agreement.

An updated section of the web site presents a series of sub menus, drop down lists, and data entryscreens that allow a noticing partner to input and/or select all the information necessary to sign upfor, or modify, one or more of the EBN services - E-Mail, FAX, and EDI. The noticing partner willbe able to select court districts, appropriate agreements, evidence of authority forms (if necessary),and enter name and address synonyms on-line. The system will automatically generate for thepartner a list of courts that are covered by a single noticing agreement (national registration) and alist of courts that must be sent individual noticing agreements. PDF versions of the completedagreements will be generated with name and address synonym lists included and court name("Sender") and subscriber ("Receiver") filled in as appropriate.

ATTACHMENT

Central Forms Repository

For courts that elect to use the NCRS and courts that retain local EBN sign-up responsibility (i.e.,all courts), the BNC will maintain a central repository of court forms on the web site for referenceby noticing partners. By clicking on a particular court, noticing partners will be able to view allnotices for that court. The following information will be provided for each form:

* Form ID* Form Name/Description

* PDF image of the form

This central forms repository will replace the current Exhibit 1 requirement of the EDI TradingPartner Agreement.

Uploading Forms

A login and information capture process will be provided for each court to add, delete, and replaceforms on the web site. The court will be responsible for keeping forms current on the web site. Thecourt will enter a Form ID, Name/Description, and PDF document for each form, which will thenbe uploaded to the BNC central forms database.

Viewing Forms

A link will be provided for viewing forms in the central repository. All courts will be listed and, byclicking on a particular court, trading partners will be able to view all notices for that court. Thefollowing information will be provided for each form:

* Form ID* Form Name/Description

* PDF image of the form

Documentation

The EBN noticing partner agreements and related forms have been updated and are posted on-lineat http://www.EBNuscourts.com. All other web site documentation and information regardingEBN services (how each service works, implementation guides, technical guides, FAQs) has beenupdated where appropriate.

2

Proposed amendments to section 342(c) of the Bankruptcy Code set out in theBankruptcy Abuse Prevention and Consumer Protection Act of 2004, S.1920, aspassed by the House of Representatives, on January 28, 2004.

SEC. 315. GIVING CREDITORS FAIR NOTICE IN CHAPTERS 7AND 13 CASES.

(a) NOTICE- Section 342 of title 11, United States Code, as amended by section102, is amended--

(1) in subsection (c)--

(A) by inserting '(1)' after '(c)';

(B) by striking ', but the failure of such notice to contain such informationshall not invalidate the legal effect of such notice'; and

(C) by adding at the end the following:

'(2)(A) If, within the 90 days before the commencement of a voluntary case, a creditorsupplies the debtor in at least 2 communications sent to the debtor with the currentaccount number of the debtor and the address at which such creditor requests toreceive correspondence, then any notice required by this title to be sent by the debtorto such creditor shall be sent to such address and shall include such account number.

'(B) If a creditor would be in violation of applicable nonbankruptcy law by sending anysuch communication within such 90-day period and if such creditor supplies the debtorin the last 2 communications with the current account number of the debtor and theaddress at which such creditor requests to receive correspondence, then any noticerequired by this title to be sent by the debtor to such creditor shall be sent to suchaddress and shall include such account number.'; and

(2) by adding at the end the following:

'(e)(1) In a case under chapter 7 or 13 of this title of a debtor who is an individual, acreditor at any time may both file with the court and serve on the debtor a notice ofaddress to be used to provide notice in such case to such creditor.

'(2) Any notice in such case required to be provided to such creditor by the debtor orthe court later than 5 days after the court and the debtor receive such creditor's noticeof address, shall be provided to such address.

'(f)(1) An entity may file with any bankruptcy court a notice of address to be used byall the bankruptcy courts or by particular bankruptcy courts, as so specified by suchentity at the time such notice is filed, to provide notice to such entity in all cases under

chapters 7 and 13 pending in the courts with respect to which such notice is filed, inwhich such entity is a creditor.

'(2) In any case filed under chapter 7 or 13, any notice required to be provided by acourt with respect to which a notice is filed under paragraph (1), to such entity laterthan 30 days after the filing of such notice under paragraph (1) shall be provided tosuch address unless with respect to a particular case a different address is specified ina notice filed and served in accordance with subsection (e).

'(3) A notice filed under paragraph (1) may be withdrawn by such entity.

'(g)(1) Notice provided to a creditor by the debtor or the court other than inaccordance with this section (excluding this subsection) shall not be effective noticeuntil such notice is brought to the attention of such creditor. If such creditor designatesa person or an organizational subdivision of such creditor to be responsible forreceiving notices under this title and establishes reasonable procedures so that suchnotices receivable by such creditor are to be delivered to such person or suchsubdivision, then a notice provided to such creditor other than in accordance with thissection (excluding this subsection) shall not be considered to have been brought to theattention of such creditor until such notice is received by such person or suchsubdivision.

'(2) A monetary penalty may not be imposed on a creditor for a violation of a stay ineffect under section 362(a) (including a monetary penalty imposed under section362(k)) or for failure to comply with section 542 or 543 unless the conduct that is thebasis of such violation or of such failure occurs after such creditor receives noticeeffective under this section of the order for relief.'.

4/

Ull

MEMORANDUM



RE: RULE 9014 AND PAPER SERVICE OF ELECTRONICALLY FILED

DOCUMENTS

DATE: MARCH 10, 2004

At the request of Jim Waldron, the Committee considered the issue of the need to serve a

paper copy of a motion initiating a contested matter when the matter is commenced by an

electronic filing. See materials behind Tab 12 in the September 2003 Agenda Book. After

discussion at the September 2003 meeting, the matter was sent to the Technology Subcommittee.

The Technology Subcommittee considered the issue further by teleconference and subsequent

email communications. Mr. Waldron provided the Subcommittee with some informally

collected data that further demonstrated that many practitioners fail to follow existing Rule 9014

that requires the service of the motion initiating a contested matter in the same manner as service

of a summons and complaint under Rule 7004. Instead, they assume that electronic service of the

motion is sufficient. The rule, of course, applies only to the service of the initial motion in the

contested matter and not to subsequent papers filed in the action. Service of those papers is

governed by Rule 7005.

The Technology Subcommittee concluded that electronic service of the initial motion

should suffice as to any counsel to a party in the proceeding if that attorney is a participant in the

CM/ECF program. The rule as proposed below also allows electronic service on any party, other

than the debtor, who has made an appearance in the case and has consented in writing to

1

receiving service electronically. This is the effect of adopting Civil Rule 5(b)(2)(D) in proposed

Rule 9014(b)(1)(A). There was some sentiment for retaining a requirement of service of a paper

copy on all parties to the contested matter, with electronic service of the initial motion only on

counsel for the party. The non-attorney participant in the CM/ECF program may not expect to

receive the initial motion (which is effectively the same as a summons and complaint) by means

of electronic service. Rather, they anticipate electronic notices only of other activity within the

case. Moreover, if one views the initial motion as the functional equivalent of a summons and

complaint, then even a participant in the CM/ECF program should be served with a paper copy of

the motion just as they would be served with a paper copy of the summons and complaint under

Rule 4(c)(1). The counter argument is that these entities have taken steps to participate

electronically in bankruptcy cases and that agreement should apply as well to service of a motion

commencing a contested matter.

The first version of Rule 9014 set out below would authorize the electronic service of the

motion initiating a contested matter on any entity that is participating in the CM/ECF program as

well as on the debtor's attorney. The debtor still would be entitled to be served with a paper copy

of the motion. In the second version of the rule, paper service of the initial motion would have to

be made on the debtor and any other party to the contested matter. Only the attorneys for the

debtor and the parties to the contested matter would be served electronically.

2

RULE 9014. CONTESTED MATTERS

2 (b) SERVICE.

3 (lW The motion shall be served in the manner provided for

4 service of a summons and complaint under by Rule 7004, except

5 that

6 (A) an entity, other than the debtor, that has made an

7 appearance in the case may be served in the manner provided by

8 Rule 5(b)(2)(D) F. R. Civ. P., and

9 (B) if the debtor is represented by an attorney, the

10 requirement in Rule 7004(b)(9) of service on the debtor's attorney

11 may be satisfied in the manner provided by Rule 5(b)(2)(D) F. R.

12 Civ. P.

13 (2Q Any paper served after the motion shall be served in the

14 manner provided in Rule 5(b) F. R. Civ. P.

15

COMMITTEE NOTE

The rule is amended to clarify the method of service of themotion initiating a contested matter. Service of the motion by anymethod is proper when the recipient of the service has alreadymade an appearance in the case and has consented in writing to beserved in that manner, including by electronic service. (See F. R.Civ. P. 5(b)(2)(D).) For example, a party that has given its consentto electronic service should both expect and prefer service to bemade electronically. This applies to any party except the debtorwho still must be served in the manner of the service of a summons

3

and complaint. Thus, the service requirements of Rule 7004(b)and (h) can be met by means of electronic service as allowed underF. R. Civ. P. 5(b)(2)(D) on any person other than the debtor. Aparty that consents in writing to service in any particular mannerwaives its right to receive service in a manner otherwise set out inRule 7004(b) and (h).

There is no change in the service rules for papers that areserved after the motion. Rule 7005 governs service of thesepapers.

Other changes are stylistic.

The following version of Rule 9014(b) would continue to require service on all parties to a

contested matter of a paper copy of the motion initiating the matter. Counsel for those parties,

including counsel for the debtor, however, could be served electronically. The Committee must

determine whether electronic service of the motion initiating a contested matter is preferable to

paper service.

RULE 9014. CONTESTED MATTERS (Electronic Service

only on Counsel)

2 (b) SERVICE.

3 (1W The motion shall be served in the manner provided for

4 service of a summons and complaint under Rule 7004, except that

5 (A) in addition to service on an entity other than the debtor,

6 an attorney for the entity may be served in the manner provided by

4

7 Rule 5(b)(2)(D) F. R. Civ. P., and

8 (B) if the debtor is represented by an attorney, the

9 requirement in Rule 7004(b)(9) of service on the debtor's attorney

10 may be satisfied in the manner provided by Rule 5(b)(2)(D) F. R.

11 Civ. P.

12 Q2) Any paper served after the motion shall be served in the

13 manner provided in Rule 5(b) F. R. Civ. P.

14

COMMITTEE NOTE

The rule is amended to clarify the method of service of themotion initiating a contested matter. Service of the motion on anattorney representing a party in the contested matter is allowed tobe made under F. R. Civ. P. 5(b)(2)(D) by any means to which theattorney has agreed in writing. For example, electronic service onthe attorney is appropriate if the attorney has consented to this formof service, and the attorney should both expect and prefer serviceto be made electronically. This service is in addition to service onthe parties to the contested matter who still must be served underF. R. Civ. P. 4(c)(1).

There is no change in the service rules for papers that areserved after the motion. Rule 7005 governs service of thesepapers.

Other changes are stylistic.

5

411

Lmn

MEMORANDUM



RE: UNITED STATES TRUSTEE PROPOSALS

DATE: FEBRUARY 24, 2004

Mr. Lawrence Friedman, the Director of the Executive Office of the United States Trustee

Program submitted a proposal for amendments to Rules 2003, 4002, 2016, and 7001 as well as a

proposed amendment to Schedule I. The submission also included a proposed Official Form 21

to implement some of the changes proposed to Rule 2016. The Committee commenced its

consideration of the proposals at the September meeting in Washington. The issue was sent to

the Subcommittee on Consumer Issues for further consideration. Mr. Friedman's proposal is set

out at the end of the materials in this tab of the agenda book.

The Subcommittee, chaired by Mr. Frank, met in Washington, D.C., on January 30, 2004,

to continue its consideration of the matter. The Subcommittee also invited several persons to

assist the Subcommittee by presenting their views of the pending proposals. The Subcommittee

heard from Mr. Alan Stout and Mr. Paul Swanson, each of whom serves as a Chapter 7 panel

trustee, as well as from Mr. Hank Hildebrand and Mr. Paul Davidson, Chapter 13 trustees. Mr.

John Rao presented the view of the National Association of Consumer Bankruptcy Attorneys

(NACBA). The Subcommittee heard first from Mr. Friedman and Ms. Martha Davis who

presented the proposal. The invited guests then presented their views, and the members of the

Subcommittee had an opportunity to question all of the speakers regarding the issues. At the

conclusion of the presentations and the question and answer session, the Subcommittee

1

reconvened with only the Subcommittee members and Administrative Office personnel to

consider the proposal.

Proposed Amendments to Rule 2003 and 4002

Mr. Friedman's proposal would amend Rules 2003 and 4002 to expand the duties of the

debtor and counsel for the debtor. Under the proposal, the debtor would be required to bring a

wide range of materials to the § 341 meeting of creditors including personal identification,

evidence of current income and expenses, documents supporting the debtor's claim to ownership

of property, evidence of insurance, and many other items. The purpose for requiring the

information and documents is to assist the panel trustee and the United States trustee in the

discharge of their duties. Mr. Friedman also noted that the proposals were intended to implement

the debtor's duties as set out in § 521(3) and (4) of the Bankruptcy Code.

The chapter 7 panel trustees who made presentations to the Subcommittee indicated that

requiring debtors to bring the documents and information to the meeting would enhance their

ability to perform their duties as required by § 704. They also indicated that they currently

receive substantial compliance with these requests in the absence of the proposed rules

amendments. They suggested that there still are instances in which compliance is not

forthcoming, and they asserted that having a rule available to support their efforts would be quite

helpful. Each trustee noted that they considered it essential that the rules changes, whatever they

may be, allow the trustees flexibility to tailor the requests to the needs they perceive in a

particular case.

The chapter 13 trustees noted that their needs are somewhat different than those of the

chapter 7 trustees. The chapter 13 trustees have a greater need for information relating to the

2

debtor's income and living expenses. They often have a significant interest in determining

whether the debtor is maintaining appropriate insurance on his or her property (primarily auto

insurance and possible homeowner's or renter's insurance). They tend to be less concerned with

some items of interest to chapter 7 trustees, but they joined in the view that it would be

appropriate to amend the rules to implement more fully the requirements of the debtor under

§ 521. They also stressed that the need for the information differs from case to case, and they

suggested that flexibility should be maintained so that trustees can get to the information when

they deem it necessary and appropriate.

Mr. Rao indicated that NACBA did not oppose the suggested amendment that would

require debtors to present appropriate identification at the meeting of creditors. He argued

against a number of the proposals on several grounds. First, he noted that the costs of compiling

and delivering many of the materials set out in the proposal would be prohibitive for some

debtors. He also noted that trustees usually do not want the information set out in the proposed

rule either because the dollar amounts presented in the case are very low (thereby reducing the

likelihood of any material omissions), or because the trustee, based on his or her experience and

judgment, does not believe that further investigation of the debtor is necessary. He noted that the

chapter 7 trustees who had spoken earlier estimated that they sought this additional information

in only 20% to 30% of their cases. Nonetheless, the proposal would require the debtors to

submit all of this information to the trustee in every case. He likewise noted that the trustees

who had spoken did not relish the thought of keeping or storing the materials that might be

submitted to them in observance of the proposed rule. He also noted that there may be privacy

problems with the submission of all of the data (such as tax returns), and that the rule did not

3

address those issues.

The Subcommittee considered the presentations as well as over seventy written comments

received from interested persons throughout the country. The comments noted many of the

issues presented by the speakers and included concerns that the submission of these materials

would also lengthen significantly the duration of § 341 meetings, that the information is largely

irrelevant in a great many cases where it would be required, would impose significant additional

costs on debtors and their counsel, and would lead many consumer bankruptcy attorneys to leave

the practice with the gap remaining being filled by petition preparers who would create even

greater problems for the system than have led to the introduction of the proposals in the first

place. The vast majority of the written comments were opposed to the proposals to expand the

debtor's duties through the rules amendments, although the proposals did have some supporters.

A full report on the comments is not included because the proposals were not published for

comment and the report would be unnecessarily lengthy given that the issue is before the

Advisory Committee only to determine whether to recommend that the Standing Committee

approve the proposal for publication and comment beginning in August 2004. If the proposals

are published, the comments received in the process will be cataloged and summarized for the

Committee.

The Subcommittee considered whether there is a need for any change in the current

system, and if change is necessary, whether the change should be in the form of a listing of

specific materials that debtors must supply to the trustee or whether a more general statement of

the debtor's obligation to cooperate with the trustee would suffice. If the Subcommittee were to

decide that the debtor should supply certain documentation or evidence at the § 341 meeting,

4

then the list of items or obligations would be identified.

The Subcommittee concluded that it is appropriate to expand the debtor's duties as set out

in Rule 4002, but that there is no need to amend Rule 2003. Since the debtor's duties are

included in Rule 4002, inserting the new obligations in that Rule is most appropriate.

Furthermore, the rule already includes the debtor's duty generally to cooperate with the trustee,

so there would be no need to restate it either in Rule 2003 or 4002. The Subcommittee believes

that the rules should more specifically set out some duties for all debtors, and that trustees should

retain their flexibility to seek other regularly compiled information in support of their duties.

After lengthy discussion, the Subcommittee concluded that all debtors should be required to

present appropriate personal identification (picture id and social security number verification) to

the trustee at the § 341 meeting. The Subcommittee then concluded that the rule should support

the trustees' efforts to administer the estate and perform their statutory duties, but that the rule

need not apply to every debtor to meet this need. Instead, the rule should allow the trustee to

request that the debtor provide within a stated time period certain materials or documents that

would normally be in the possession of the debtor and that are relevant to the trustee's

administration of the case. The rule already requires general cooperation with the trustee, so

nothing in the rule as proposed should be read to limit a trustee's ability or right to seek further

information from the debtor.

The Subcommittee's proposal requires the debtor to provide the materials to the trustee

within 20 days of the request, or to submit a statement indicating that the debtor does not have

the materials or documents. The Subcommittee did not consider in significant detail the amount

of time allowed for the debtor to submit the materials or documents. A shorter period, for

5

example, 14 days, may be appropriate for at least two reasons. First, the documents and

materials set out in proposed Rule 4002(b)(2) generally should be relatively accessible for the

debtor, so sending them to the trustee within two weeks of a request should not be unduly

burdensome. Moreover, if the debtor cannot locate or does not have the materials, a statement to

that effect meets the requirements of the rule. Secondly, Under Rule 2003(a), the § 341 meeting

can be held as early as twenty days after the commencement of the case. Therefore, if the trustee

feels a need to have the materials available at the meeting, the trustee can act quickly to make the

request and the materials and documents can be presented to the trustee prior to or at least at the

meeting. This would serve to avoid the need to continue the meetings or seek other delays in

relevant deadlines. No time limit is set for the submission of other materials that the trustee may

request in a particular case. The range of these materials and documents is essentially unlimited,

so the Subcommittee preferred to leave the process for obtaining that information to negotiations

between the trustee and the debtor's counsel.

The recommendation of the Subcommittee on Consumer Issues for the amendment of

Rule 4002 is set out below.

1 4002. Duties of Debtor.

2 Lai General Duties. In addition to performing other

3 duties prescribed by the Code and rules, the debtor shall;

4 (1) attend and submit to an examination at the times

5 ordered by the court;

6 (2) attend the hearing on a complaint objecting to discharge

6

7 and testify, if called as a witness;

8 (3) inform the trustee immediately in writing as to the

9 location of real property in which the debtor has an interest and the

10 name and address of every person holding money or property

11 subject to the debtor's withdrawal or order if a schedule of property

12 has not yet been filed pursuant to Rule 1007;

13 (4) cooperate with the trustee in the preparation of an

14 inventory, the examination of proofs of claim, and the

15 administration of the estate; and

16 (5) file a statement of any change of the debtor's address-;

17 and

18 (6) if the debtor used an incorrect Social Security number in

19 connection with the bankruptcy filing, take steps to correct the

20 bankruptcy court record and notify credit reporting agencies.

21 (b) Debtor's Duty to Provide Documentation at the

22 Meeting of Creditors and on Request of Trustee or United States

23 Trustee.

24 (1) Personal Identification. In each case, an individual

25 debtor shall bring to the meeting of creditors picture identification

26 and evidence of Social Security number(s) or provide a written

27 statement setting forth that such documentation is not applicable

28 or in the debtor's possession:

7

29 2Q Request for Financial Information. In a particular

30 case, the trustee or the United States trustee may make a written

31 request to the debtor for the production of additional documents or

32 materials reasonably necessary for administration of the estate,

33 including:

34 (A) evidence of income, such as pay stubs, during

35 the ninety day period immediately preceding the

36 meeting of creditors,

37 (B) the debtor's federal income tax returns for the

38 two (2) years preceding the meeting of creditors,

39 with W-2s and any other attachments;

40 (C) statements for depository accounts, including

41 checking, savings, and money market accounts,

42 covering the time period that includes the date of

43 filing and the ninety day period prior to filing-

44 (D) title and lien documents relating to property of the

45 estate-

46 (E) homeowner or renter insurance policies, or

47 (F) automobile or other personal property insurance

48 policies.

49 Q• Response to Request for Financial Information.

50 Within twenty (20) days after receiving a request under

8

51 subparagraph (2), the debtor shall either:

52 (A) provide the requested documents or materials, to the

53 extent that the documents or materials are in the possession of the

54 debtor; o

55 (B) provide to the trustee or United States trustee a

56 written statement stating why the debtor cannot timely produce the

57 requested documents or materials, or setting forth the debtor's

58 objections to production of the requested documents or materials.

COMMITTEE NOTE

The rule is amended to implement the directives of § 521(3) and (4) of the Bankruptcy Code that the debtor cooperate withthe trustee to permit the trustee to perform the trustee's duties andto provide the trustee with materials and documents necessary tothe administration of the estate. At the meeting of creditors, eachindividual debtor must present appropriate evidence of the debtor'sidentity and social security number or provide a statement that suchevidence is not applicable or is not in the debtor's possession. Therule further requires that, upon written request, the debtor providethe trustee or the United States trustee with documents or materialswhich, in particular cases, may be needed by the trustee and UnitedStates trustee to perform their duties under the Code. The rule isnot intended to authorize blanket requests to all debtors to produceall of the materials enumerated in subsection (b)(2) of the rule.The rule permits the trustee and the United States trustee todetermine on a case by case basis whether further investigation isnecessary and whether they believe that the production ofadditional documents and materials by the debtor is necessary.The rule does not require that the debtor create documents orobtain documents from third parties; rather, the debtor's obligationis to produce documents which the debtor possesses or that are

9

under the debtor's control. If the debtor objects to a request forproduction of documents or materials under this rule, the disputecan be resolved by the court on motion of a party in interest underRule 9014.

Proposed Amendments to Rule 2016 and the Proposal of a New Form

The Subcommittee also considered the proposal submitted by Mr. Friedman to amend

Rule 2016(b) to require the attorney for the debtor to disclose substantially more information

regarding the nature and scope of the representation that is required under the current version of

Rule 2016. Again, there were a number of written comments that primarily objected to the

proposal. The participants in the focus group discussion in Washington D.C. addressed the issue

to a lesser extent than the proposed amendments to Rule 4002. They did, however, indicate

support for the proposal to the extent that it might assist the trustees in identifying attorneys who

engage in practices detrimental to the operation of the bankruptcy system. Mr. Hildebrand, a

chapter 13 trustee, related that a few attorneys in his jurisdiction appear to be taking excessive

fees and failing to disclose those fees by asserting that they performed legal services unrelated to

the bankruptcy case. Mr. Friedman argued that this is a developing trend that the United States

Trustee Program has observed and that steps need to be taken to curb the practice. To

accomplish that oversight goal, the proposal would require the debtor's attorney to disclose the

dollar amount of all fees paid or promised to be paid to the attorney by or on behalf of the debtor.

The proposal submitted by the Director of the Executive Office of the United States Trustee also

included a requirement that the attorney disclose the nature and scope of the representation to be

provided in connection with the bankruptcy case. The proposal included as well a requirement

that both the debtor and the debtor's attorney sign a form setting out the information.

10

The Subcommittee considered the proposal at the conclusion of the presentations. The

consensus was that any amendment to the rule must take account of concerns for the preservation

of the attorney client privilege. Furthermore, since the disclosure is one made by the debtor's

attorney, it is appropriate only that the attorney execute the statement. Additionally, question 9

on the Statement of Financial Affairs (Official Form 7) already requires the debtor to disclose

this same information on a form that the debtor must sign. Consequently, the Subcommittee

concluded that the form need not include the debtor's signature.

The Subcommittee discussed the scope of the proposal, especially as it would have

required the disclosure of the nature of the services that the attorney agreed to provide. While the

amount of fees paid to the debtor's attorney is not privileged, disclosure of the scope of those

services could violate the privilege. For example, the debtor may have sought legal advice as to

a possible criminal matter. A debtor could seek advice about the possibility of commencing or

defending a possible divorce action. The advice could involve the possibility of a

nondischargeability action in the bankruptcy case. In each of these instances, the rule as

proposed could lead to the disclosure of otherwise confidential communications. The

Subcommittee recommends that the rule and the proposed disclosure form be amended as set out

below. The rule would not require the disclosure of this information. In proper circumstances,

the trustee or other party in interest can seek the information.

The form proposed by the Subcommittee is proposed as a replacement of Directors Form

B203. Mr. Friedman requested that the form be an Official Form, but the Subcommittee did not

consider it necessary to issue an Official Form. The current Director's Form is nearly universally

used by attorneys, and it is included in the software programs, so there is arguably little need to

11

issue the form as an Official Form that requires publication and comment as well as approval by

the Standing Committee and the Judicial Conference.

Rule 2016. Compensation for Services Rendered and

Reimbursement of Expenses.

1 (b) Disclosure of Compensation Paid or Promised to

2 Attorney for Debtor. Every attorney for a debtor, whether or not the

3 attorney applies for compensation, shall file and transmit to the

4 United States trustee within 15 days after the order for relief, or at

5 another time as the court may direct, the statement required by § 329

6 of the Code including whether the attorney has shared or agreed to

7 share the compensation with any other entity. The statement shall

8 include the particulars of any sharing or agreement to share by the

9 attorney, but the details of any agreement for the sharing of the

10 compensation with a member or regular associate of the attorney's

11 law firm shall not be required. To the extent not privileged under

12 applicable law, the statement also shall disclose the dollar amount of

13 all other fees paid by or on behalf of the debtor to the attorney within

14 the one year period prior to the date the petition was filed, as well as

15 the details of any transfer, assignment or pledge of property, outright,

12

16 in trust, or as security, from, or on behalf of the debtor within that

17 period. A supplemental statement shall be filed and transmitted to the

18 United States trustee within 15 days after any payment or

19 agreement not previously disclosed.

COMMITTEE NOTE

The rule is amended to expand the debtor's attorney'sdisclosure obligations regarding fees paid to the attorney by or onbehalf of the debtor in the year prior to the commencement of thecase, to the extent that such a disclosure is not privileged underapplicable law. In addition to disclosing all fees for servicesrendered in connection with the bankruptcy case, as required by§329 of the Code, the disclosure by the attorney for the debtor willdisclose all other compensation that the attorney received from oron behalf of the debtor for any services rendered in the year prior tothe commencement of the case. The attorney needs only todisclose the amount of the compensation. The rule does notrequire automatic disclosure of the scope or the nature of theservices rendered and the disclosure of the amount of thecompensation should not be construed as a waiver of anyapplicable privilege. If the disclosure prompts action by a party ininterest, the court can enter any appropriate order to protect theattorney client privilege.

The form proposed by Mr. Friedman included two questions (numbers 7 and 8) that would

have required the debtor's attorney to disclose the nature and scope of the representation the attorney

agreed to provide in the case. The form as set out below does not include those questions. As

discussed above, the Subcommittee concluded that the form should not require the disclosure of this

information in order to avoid the disclosure of otherwise confidential communications. The decision

to exclude these questions from the form was also based on a concern that the courts have not

reached any consensus as to the minimum scope of representation of a debtor in a bankruptcy case.

13

Including these questions could be construed as setting these minimum standards for representation,

and it is arguably beyond the scope of the rules of practice and procedure to set these standards.

Moreover, even if the rules can include such provisions, setting those standards would not be proper

absent substantial additional consideration and investigation. The Subcommittee recognizes that the

deletion of those questions from the form limits the effectiveness of the form to establish these

minimal standards, but the variety of views held by the courts renders it imprudent to set the

standards in this way.

Director's Form B203. DISCLOSURE OF COMPENSATION OF ATTORNEY FOR

DEBTOR(S)

[Caption as in Form 16B.]

A. Compensation for services rendered in contemplation of or in connection with the

current case:

1. Pursuant to 11 U.S.C. § 329(a) and Bankruptcy Rule 2016(b), I certify that I

am the attorney for the above-named debtor(s) and that compensation paid to

me within one year before the filing of the petition in bankruptcy, or agreed to

be paid to me, for services rendered or to be rendered on behalf of the debtor(s)

in contemplation of or in connection with the bankruptcy case is as follows:

For legal services, I have agreed to accept ................ $

14

Prior to the filing of this statement I have received.. $

B alance D ue .............................................................. $

2. Expenses for the current case: I certify that I have received the following

amounts for payment of expenses:

LJ Filing F ee ........................................................... $

Lj O ther (specify) ............................................. $

3. The source of the compensation and expenses paid to m e for the current case

was:

UL Debtor's wages, earnings or services rendered by debtor.

If debtor rendered services as compensation, please state the

details of what was done by the debtor and the value of the

services:

Q Other (Specify, e.g., tax refund, proceeds from sale of stock or

name and address of person providing the funds):

4. The source of compensation to be paid to m e is:

Li Debtor's Chapter 13 plan.

Ll Other (Specify, e.g., tax refund, proceeds from sale of stock or

15


5. Including the amounts listed above, the total am ount of all direct and indirect

monetary payments, transfers, and assignments to me by, or on behalf of, the

debtor during the one-year period immediately preceding the filing of the

petition is $ . I n addition, I received the following

direct or indirect transfers or assignments of other property from or on behalf of

the debtor during that period:

6. In regard to 11 U.S.C. § 504:

Li I have not agreed to share the above-disclosed compensation with any

other person unless they are members and associates of my law firm.

I- I have agreed to share the above-disclosed compensation with a person

or persons who are not members or associates of my law firm. The

amount paid or to be paid along with the name and address of the

person or entity with whom the compensation is shared is set forth

below. In addition, a copy of the compensation sharing agreement is

attached.

Name:

16

Address:

Amount: $

B. Compensation paid other than for services rendered in contemplation of or in connection

with the current case:

1. In the year prior to the filing of this bankruptcy case, the debtor or another on

behalf of the debtor has directly or indirectly paid to me the amount of

$ for other debt counseling or representation in bankruptcy cases.

2. In the year prior to the filing of this bankruptcy case, the debtor or another on

behalf of the debtor has directly or indirectly paid to me the amount of

$ for other legal representation and advice.

CERTIFICATION

I certify that the foregoing is a complete statement of any agreement or arrangement

for payment of legal fees and expenses for representation of the debtor(s) in this bankruptcy

proceeding.

Dated:

Signature of Attorney

Name of Law Firm

COMMITTEE NOTE

The form requires the disclosure of all compensation paid or promised to be paid to thedebtor's attorney in contemplation of or in connection with the case. A copy of any agreementbetween the debtor and the attorney could be attached to meet this requirement.

17

The form also requires the attorney to disclose any other compensation received from or onbehalf of the debtor in the year prior to the commencement of the case for services rendered in anymatter other than representation in contemplation of or in connection with the case. This disclosureextends only to the amount of the compensation and does not require the attorney to disclose thenature or scope of the representation. The scope and nature of the representation may be protectedby the attorney client privilege, although neither Bankruptcy Rule 2016 nor this Official Form shouldbe construed to mean either that the information is or is not protected by the privilege.

Please note that Part B requesting information about fees paid to the debtor's counsel inthe year prior to the filing of the petition for services rendered other than in connectionwith the case would be deleted from the form if the Committee concludes that it is beyondthe scope of the rules enabling act.

18

U.S. Department of Justice

Executive Office for United States Trustees

Office of the Director Washinigton, D.C. 20530

August 1, 2003

Honorable A. Thomas SmallUnited States Bankruptcy JudgeUnited States Bankruptcy CourtCentury Station, Room 220300 Lafayette Street MallRaleigh, NC 27602

Professor Jeffrey W. MorrisUniversity of DaytonSchool of Law300 College ParkDayton, OH 45469-2772

Re: Proposed Amendments to the Federal Rules of Bankruptcy Procedure

Dear Judge Small and Professor Morris:

On behalf of the United States Trustee Program, I am pleased to submit the followingproposals to amend the Federal Rules of Bankruptcy Procedure and ask that they be considered

by the Advisory Committee on Bankruptcy Rules. The proposals fall into four general areas.

1. Proposed Amendments to Facilitate Performance of Duties by Debtors and Trustees

Bankruptcy trustees often ask debtors to provide supporting documentation for the assets,liabilities, income and expenses they report on their bankruptcy petitions schedules andstatements. In several districts, debtors are already required to produce these documents by localrule. Based on our experience, we have found that such a rule fosters good bankruptcy practiceand improves administration, and we would urge the Committee to adopt a similar requirementinto the national rules.

Under all chapters of the Bankruptcy Code, the trustee has a statutory duty to "investigatethe financial affairs of the debtor." 11 U.S.C. § 704(4). The debtor has a corresponding statutoryduty to "surrender to the trustee all property of the estate and any recorded information, includingbooks, documents, records, and papers, relating to property of the estate." 11 U.S.C. § 521(4).There currently is no national rule that implements these obligations. While the absence of a rule

-2-

does not foreclose the trustee from asking for information or lessen the debtor's duty to be

forthcoming, it does affect the process insofar as it places the burden on the trustee toaffirmatively seek out information in the first instance. If the trustee requests no information, thedebtor has no obligation to be forthcoming, and the trustee's "investigation" consists only of hisor her review of the filed petition, schedules and statements, and the debtor's testimony at the §341 meeting. The better practice, and the one most experienced trustees use to find assets,confirm valuations, or unravel financial dealings, is to require debtors to produce certain basicdocuments to confirm what they have claimed in the petition, schedules and statements.Correspondingly, the better practice for bankruptcy counsel and their clients is to assemble similardocuments in advance of filing to ensure, among other things, that they provide accurateinformation to the bankruptcy court.'

Based on the documents that are reported to be most useful among trustees andincorporated in some local rules,2 we propose the following changes to implement the debtor'sduty. This proposal attempts to limit production to those core documents that a reasonablydiligent trustee would seek. The production of these documents should not be undulyburdensome because they would have been assembled by the debtor and debtor's attorney toprepare the petition, schedules and statements. For example, many of them will be the basis forthe information reported on Schedule I and the Statement of Affairs. A national rule wouldestablish a minimum standard of what all debtors should be expected to "surrender" and ensuretrustees have basic information to inspect early in a case. It would also prepare trustees to morereadily identify and recover assets instead of leaving such matters to subjective, ad hocassessments.

Our proposal amends Rule 2003 in order to tie the production of the documents with theconduct of the first meeting of creditors. We would also propose a complementary amendment toRule 4002 to include the debtor's obligation to cooperate with and furnish such information as theUnited States trustee and trustee may request. Finally, we would amplify the debtor's duties torequire the debtor to take action to correct inaccurate information resulting from the intentionalor inadvertent misuse of a Social Security number.

A bankruptcy case is commenced with the filing of a bankruptcy petition. 11 U.S.C. §§ 301-303.If the schedules and statements are not filed with the petition, they must be filed within 15 days. Fed. R. Bankr. P.1007(c). All the documents must be verified, Fed. R. Bankr. P. 1008; they also "may be amended by the debtor asa matter of course at any time before the case is closed," Fed. R. Bankr. P. 1009.

2 Attached at Attachment 1 are copies of similar local rules that have been adopted in some

districts.

3 In certain circumstances, the failure to keep or produce such information could lead to denial of adebtor's discharge. See, e.g., 11 U.S.C. § 727(a)(3) (concealing, destroying, falsifying or failing to preserve booksand records unless justified under the circumstances) and § 727(a)(4)(D) (knowingly and fraudulently withholdingpossession of any recorded information relating to the debtor's property or financial affairs).

-3-

Rule 2003. Meeting of Creditors or Equity Security Holders.

(b) Debtor's Duly to Provide Documentation at Meeting.

LU Financial Information. Unless the trustee or UnitedStates trustee instructs otherwise, in each case under chapter 7, 12,and 13, and in each individual case under chapter 11. the debtorshall bring the following documentation to the § 341 meeting orfurnish a written statement setting forth why such documentation isnot applicable or available:

(A) Picture identification and proof of SocialSecurity number(s) in a form prescribed by theUnited States trustee:

(B) Documents to support the entries on Schedule Iincluding all pay stubs or other proof of earningsreceived and amounts deducted from earningsduring the ninety day period immediately precedingthe 4 341 meeting:

(C) Copies of the debtor's federal, state, and localincome tax returns for the two (2) years precedingthe meeting of creditors, with W-2s and any otherattachments;

(D) Documents to support the entries on Schedule Jincluding canceled checks, check register, paid billsor other proof of expenses:

(E) Copies of bank or credit union statements for alldepository accounts including checking, savings,money market or other, which show the balance onhand on the date of filing and all transactions duringthe ninety day period prior to filing:

(F) Copies of stock certificates, bonds, brokeragestatements, or other evidence of deposits, savings orinvestments.

(G) Copies of original and duplicate certificates oftitle for titled assets including but not limited to

-4-

automobiles, boats, motorcycles, trailers, and mobilehomes-,

(H) Copies of security agreements, financingstatements, and personal property leases, includingany lease relating to a leased motor vehicle,

(I) For all real estate in which the debtor has aninterest:

(1) Title documents including deeds, registered

land certificates of title, land contracts, or leases,

(2) Copies of all mortgaaes and liens,

(3) Evidence of the value of real estate such asindependent appraisal, if available, or current taxstatement or assessment:

(J) Copies of closing statements for any interest inreal estate sold by the debtor within the year prior tofilinp:

(K) Copies of any separation agreements. divorceiudgments and property settlement agreementsentered into or granted during the twelve (12)months prior to filing,

(L) Copies of homeowners or renters insurance polices:

(Ml Copies of life insurance policies either ownedby the debtor or insuring the debtor's life:

(N) In chapter 12 and chapter 13 cases. copies ofcasualty insurance policies: and

(0) If the petition, statements and schedules were filed by electronicmeans, the original signed petition, statements and schedules.

(2) Additional Information. Nothing in this paragraph shall limit thedebtor's duty to provide such additional information as the trustee or UnitedStates Trustee may reuuest.

4002. Duties of Debtor.

-5-

In addition to performing other duties prescribed by the Code and rules, thedebtor shall (1) attend and submit to an examination at the times ordered by thecourt; (2) attend the hearing on a complaint objecting to discharge and testify, ifcalled as a witness; (3) inform the trustee immediately in writing as to the locationof real property in which the debtor has an interest and the name and address ofevery person holding money or property subject to the debtor's withdrawal ororder if a schedule of property has not yet been filed pursuant to Rule 1007; (4)cooperate with the trustee in the preparation of an inventory, the examination ofproofs of claim, and the administration of the estate; and (5) cooperate with, andfurnish such information as, the United States trustee or trustee may requestconcerning the debtor's identity, income, expenses. assets. liabilities, or othermatter relevant to the administration of the case: (6) file a statement of any changeof the debtor's address-; and (7) if the debtor used an incorrect Social Securitynumber in connection with the bankruptcy filing, take steps to correct thebankruptcy court record and notify credit reporting agencies.

2. Proposed Amendments to Provide Additional Disclosures & Protections for Debtors

Bankruptcy Rule 2016 implements 11 U.S.C. § 329(a) which requires every attorneyrepresenting a debtor to file a statement of the compensation paid or agreed to be paid "incontemplation of or in connection with" the bankruptcy case. We urge the Committee to amendRule 2016(b) to require the disclosure of more information concerning the financial relationshipbetween the debtor and debtor's counsel.

First, counsel should be required to enumerate the actual services that are going to beprovided to the debtor and the debtor should be required to sign the statement. Too often, whenthe subject of attorney compensation arises in post-petition inquiries, the debtor and the attorneydisagree about the terms of the engagement. This happens more frequently in legalrepresentations where there is no written fee agreement. Having the debtor sign the detailedstatement of compensation ensures that debtor is aware of counsel's representations and wouldhelp to alleviate this problem.

Second, counsel should be required to disclose all fees received from the debtor within thelast year, regardless of whether they are "in contemplation of or in connection with" a bankruptcycase. This would provide a broader understanding of the total amount of professional fees paidby, or on behalf of, the debtor to debtor's counsel. If, for example, counsel was paid $10,000.00for an uncontested divorce occurring 8 months prior to the petition date, this fee would have tobe disclosed under the revised Rule 2016(b). See, e.g., In re Zepecki 258 B.R. 719 (Bankr. 8"Cir. 2001) (upholding disgorgement of excessive fees paid in contemplation of bankruptcy insteadof the purported real estate sales and tax transaction). Under existing rules, this informationmight otherwise only be revealed in the response to question 10 of the statement of financial

-6-

affairs4 , and then only if the debtor did not deem such a payment to be in the ordinary course ofbusiness. The court, the parties, and the United States trustee should be afforded a more certainopportunity to be apprized of such legal payments.

Clarification of Rule 2016(b) disclosures also appears warranted in light of the FifthCircuit's decision in In re Prudhomme 43 F.3d 1000 (5h Cir. 1995). There, the Court uphelddisgorgement of an undisclosed retainer that counsel had received two year prior to bankruptcy.finding inter alia that it was paid in contemplation of the bankruptcy. The amendment proposedbelow does not extend the period for reporting beyond one year, but it does amplify and clarifythe nature and extent of the information to be disclosed.

In addition to making the changes to Rule 2016(b) set forth below, we propose adoptionof a new Official Form. A suggested form appears at Attachment 2.

Rule 2016. Compensation for Services Rendered and Reimbursement ofExpenses.

(b) Disclosure of Compensation Paid or Promised to Attorney for Debtor. Everyattorney for a debtor, whether or not the attorney applies for compensation, shallfile and transmit to the United States trustee within 15 days after the order forrelief, or at another time as the court may direct, the statement required by § 329of the Code including whether the attorney has shared or agreed to share thecompensation with any other entity. The statement shall be signed by the attorneyand the debtor, and shall include the details of the legal services to be provided tothe debtor for the fee disclosed, and the particulars of any sharing or agreement toshare by the attorney, but the details of any agreement for the sharing of thecompensation with a member or regular associate of the attorney's law firm shallnot be required. The statement shall also include disclosure of all fees paid by thedebtor or on behalf of the debtor to the attorney within a one year period prior tothe date the petition was filed, as well as the details of any transfer, assignment orpledge of property, outright, in trust, or as security, from, or on behalf of thedebtor. A supplemental statement shall be filed and transmitted to the UnitedStates trustee within 15 days after any payment or agreement not previouslydisclosed.

' Question 10 is entitled "Other transfers"

"a. List all other property, other than property transferred in the ordinary course of the business orfinancial affairs of the debtor, transferred either absolutely or as security within one yearimmediately preceding the commencement of this case."

-7-

3. Proposed Amendment to Allow Certain § 727 Actions to be Brought by Motion

The United States Trustee Program recommends that the Advisory Committee adoptstreamlined procedures to prevent the debtor's discharge in two limited instances provided in 11U.S.C. § 727(a)(8) and (9). Section 727(a)(8) provides that a chapter 7 discharge shall not begranted if the debtor previously received a chapter 7 or chapter 11 discharge in a case commencedwithin six years before the date of the filing of the petition. Section 727(a)(9) similarly providesthat a chapter 7 discharge shall not be granted if the debtor received a chapter 12 or chapter 13discharge in a case commenced within six years before the date of filing of the petition unlesscreditors were repaid 100% or, alternatively, 70% and the plan was filed in good faith andpayments represented the debtor's best effort.

Under the existing rules, Fed. R. Bank P. 4004(d) and 7001(4), a party must file anadversary complaint to deny or revoke a debtor's discharge under § 727(a)(8) and (9). Instead ofrequiring a complaint to be filed, we propose that a motion should suffice to bring to the court'sattention the fact that the debtor is not eligible to receive a discharge because of the priordischarge. Since adversary proceedings are far more time-consuming and expensive thanmotions, this amendment would save considerable resources for all parties including the courts.

Use of a motion is appropriate given the limited scope of inquiry that is necessary to ruleon the issues involved. There is generally no need for discovery in these matters. The court cantake judicial notice of its own records as well as those of another bankruptcy court to determinewhether granting a discharge would violate § 727(a)(8) or (9). Because of the limited scope ofinquiry, there is little potential for abuse of this procedure. Further, debtors would still be givennotice and an opportunity to respond thereby safeguarding their interests as well.

The only area in which testimony or evidence may be necessary would involve adetermination of "good faith" and "best efforts" under Section 727(a)(9)(B). In that instancelimited testimony by the debtor would likely be sufficient; otherwise, evidence would generally becontained in the court files.

The following proposed amendment to Rule 7001(4) of the Federal Rules of BankruptcyProcedure would allow these specific uncomplicated proceedings to be brought by motion.Conforming changes would also have to be made to Rule 4004, and may be advisable elsewherein the Federal Rules to recognize the use of motions in these two limited instances.

We attach a motion for order to show cause procedure which is being successfully used inthe Northern District of Texas. See Attachment 3.

-8-

Rule 7001. Scope of Rules of Part VII.

An adversary proceeding is governed by the rules of this Part VII. Thefollowing are adversary proceeding:

(4) a proceeding to object to or revoke a discharge, except that aproceeding to object to or revoke a discharge under the provisions of & 727(a)(8)or § 727(a)(9) may be brought by motion.

4. Proposed Amendment to Schedule I - Current Income of Individual Debtors.

The instructions to Schedule I should be amended to insert "7," between "chapter" and"12." The income of a non-filing spouse is relevant to a Section 707(b) analysis and has been forsome time. See Matter of Strong, 84 B.R. 541, 543 (Bankr. N.D. Ind. 1988) ('There is nojustification for ignoring the impact of a non-petitioning spouse's income on a debtor's financialsituation."). Given that the current language in Schedule I requires only disclosure of a non-filingspouse's income in chapter 12 or 13 cases, the burden is on the United States Trustee or chapter7 trustee to elicit this information either prior to or at the Section 341(a) meeting. The simpleaddition of chapters 7 and 11 to the form will save the United States trustee a lot of work.

Thank you for giving these proposals your prompt consideration. If there is anyinformation or assistance that we can provide please do not hesitate to call me or Martha L. Davisat (202) 307-1391.

Very truly yours,

Zýý wence .Friedman

Director

Enclosures

ATTACHMENT 1

Eastern District of Michigan

RULE 2003-2 Documentation at the Meeting of Creditors

In cases under chapters 7, 12, and 13, and in individual cases under chapter 11, to the extent they are inthe debtor's possession and are applicable to the case, the debtor shall have available at the meeting ofcreditors, neatly arrahiged, all of the following:

* (a) documents to support all entries on Schedule I, including wage stubs, tax returns, or otherproof of earnings;

* (b) documents to support all entries on Schedule J, including canceled checks, paid bills, or otherproof of expenses;

* (c) certificates of title (originals if available, otherwise copies) for titled assets, including vehicles,boats and mobile homes;

* (d) originals of bank books; check registers; bonds; stock certificates; bank, brokerage and creditcard statements;

e (e) copies of leases, mortgages, deeds and land contracts;a (f) copies of life insurance policies either owned by the debtor or insuring the debtor's life;* (g) current property tax statements;• (h) asset appraisals;* (i) keys to non-exempt buildings and vehicles;* (j) divorce judgments and property settlement agreements; and- (k) in chapter 12 and chapter 13 cases, copies of casualty insurance policies.

Southern District of Ohio

Rule 4002-1

(5) the terms of any financing involved, including the interest rate;

(6) a description of any method or proposal by which the interest held by any otherentity in the collateral affected by the credit may be protected; and

(7) copies of all documents by which the interest of all entities in the collateral affectedby the credit was created or perfected, or, if any of those documents are unavailable, thereason for the unavailability. The debtor shall make its best effort to obtain and file anydocuments which are unavailable as soon as possible after the motion is filed.

(c) Preliminary Hearing. If the debtor asserts an immediate need for the obtaining of credit,the court may schedule a preliminary hearing on the motion after notice has been provided to any entityclaiming an interest in the collateral affected by the credit to be obtained. Notice provided pursuant to LBR9013-3 may be by telephone or telecopier (fax) if time does not permit written notification.

4002-1 DEBTOR - DUTIES

(a) Procedure.

(1) Requests by Case Trustee. The debtor shall comply promptly with all trusteerequests for information whether oral or written. Not later than twenty (20) days afterservice of any written request on the debtor and the debtor's counsel, debtor shall serve onthe trustee the information and/or documents requested; or serve on the trustee and file awritten motion for a protective order, a memorandum in support and a request for a hearing.

(2) Requests by United States Trustee. Each debtor in a chapter 7 case shall bringto the §341 meeting either the following documentation, if applicable, or a statement usingthe designated letter for identification, setting forth why such documentation is notapplicable or available.

(A) Title documents to all real estate in which the debtor has an interest,including deeds, land contracts, or leases, and closing statements for any interestin real estate sold by the debtor within the last year;

(B) All mortgages and liens upon real estate in which the dcbtor has an interestand details of all certificates of judgment; including the name of the judgmentcreditor, date of filing, judgment docket number, page and amount.

(C) All life insurance policies owned by the debtor;

(D) Certificates of title (or copies) to all motor vehicles, including boats, ownedby the debtor;

(E) Federal income tax return for the last calendar year filed by the debtor;

Page 40

Rule 4003-1

(F) Separation agreements or decrees of dissolution or divorce entered into orgranted during the last year,

(G) All documents evidencing the debtor's interest in any retirement account,including individual retirement accounts, account statements, summary plandescriptions and qualification letters from the IRS. For individual retirementaccounts, an accounting of all contributions to the account since its inception isalso required;

(H) Security agreements, financing statements, and personal property leases;

(I) Stock certificates, bonds, credit union and savings accounts passbooks orstatements, and other evidence of investments or savings;

(J) Evidence of the value of real estate in which debtor has an interest (countyauditor appraisal card or appraisal, if available);

(K) If the debtor acquires an interest in property within 180 days after the dateof filing of the petition (1) by request, devise or inheritance, (2) as a result of aproperty settlement agreement with the debtor's spouse or of an interlocutory orfinal decree, or (3) as a beneficiary of a life insurance policy or of a death benefit,the chapter 7 trustee must be notified immediately.

(b) Limited Filing with the Court. The trustee shall not file a copy of a request forinformation unless the debtor fails to comply with this rule and the trustee or any other party in interestrequests the court to compel compliance. The debtor shall not file a copy of a response to a request forinformation unless it is in the form of amendments to schedules, statements of affairs or other statementsor lists required to be filed by Rule 1007, or unless the debtor is otherwise required to do so.

(c) Sanctions. Failure to comply with a trustee's request for information may result, after noticeand hearing, in the imposition of sanctions.

4002-2 ADDRESS OF DEBTOR

The change of address required to be filed by Rule 4002 shall be served according to LBR 9013-3.

4003-1 EXEMPTIONS

(a) Service of Objection. Any objection by the trustee or other party in interest to propertyclaimed as exempt shall be served pursuant to LBR 9013-3.

Page 41

UNITED STATES BANKRUPTCY COURTSOUTHERN DISTRICT OF OHIO

Case No.

NOTICE TO INDIVIDUAL CONSUMER DEBTOR(S)11 U.S.C. Section 342(b)

PLEASE TAKE NOTICE THAT as a consumer debtor, you are advised, pursuant to the provisions of I IU.S.C. Section 342(b), prior to the commencement of your case that you may proceed under any one of thefollowing chapters of Title 11, United States Code:

Chapter 7 Liquidation, orChapter 11 Reorganization, orChapter 12 Family farmer, orChapter 13 Repayment of all or part of the debts

of an individual with regular income

By filing a petition in bankruptcy you have invoked the jurisdiction of a United States Court. If you do notappear as ordered you may either be arrested and conveyed to court by a United States Marshal, or yourcase dismissed and discharge in bankruptcy denied.

All of your property is now under the exclusive control of the United States Bankruptcy Court. I is yourduty to keep and preserve that property and be accountable to the proper court officials.

The law requires that you attend and submit to an examination under oath concerning the conduct of youraffairs, the cause of your bankruptcy, your transaction with creditors and other persons, the amount, kindand whereabouts of your property and possessions, and all other matters which may affect theadministration and settlement of your estate of the granting of your discharge.

You are not to dispose of any property, including money, or allow any creditors to take such propertywithout the written authority of the court. The right of your secured creditors will be determined by thecourt, and no creditors now have the right to possess any property upon which they claim to have a lien orinterest.

If you have changed your address since you filed your petition, so inform the trustee at the meeting of

creditors. Should you change your address thereafter, be sure to keep the court informed of your correctaddress up until the time your case is dosed.

If you need information or advice as to your rights and obligations under the law, contact your attorney.The court cannot give you legal advice.

Michael D. WebbDate: Clerk, U.S. Bankruptcy Court

CHAPTER 7 CASESSEE REVERSE SIDE FOR ADDITIONAL INFORMATION

IT IS NECESSARY TO BRING THE FOLLOWING PAPERSTO THE MEETING OF CREDITORS WITH YOU:

1. Title documents to all real estate in which the debtor has an interest, includingdeeds, land contracts, or leases, and dosing statements for any interest in realestate sold by the debtor within the last year;

2. All recorded mortgages and recorded liens upon real estate in w•ich the debtor hasan interest aid details of all certificates ofjudgement; including the name of thejudgment creditor, date of filing, judgment docket number, page and amount;

3. All life insurance policies owned by the debtor;

4. Certificate of title (or copies) to all motor vehicles, boats, etc., owned by thedebtor;

5. Federal income tax return for the last calender year filed by the debtor;

6. Separation agreements or decrees of dissolution or divorce entered into or grantedduring the last year;

7. All documents evidencing the debtor's interest in any retirement account(s),including individual retirement account(s), account statement(s), summary plandescription(s) and qualification letter(s) from the IRS. For individual retirementaccount(s), an accounting of all contributions to the account(s) since its inceptionis also required,

8. Security agreement(s), financing statement(s), and personal property lease(s);

9. Stock certificate(s), bond(s), credit union and saving(s) account(s) passbook(s)and/or saving(s) account(s) statement(s), checking account statement(s) and otherevidence of investment(s) or saving(s);

10. Evidence of the value of real estate in which the debtor has an interest (countyauditor appraisal card or appraisal, if available);

11. List of debtor's personal property with each item's estimated market value, if samedoes not appear in the schedules filed in this matter;

12. Pay vouchers or record of earnings for the forty (40) day period prior to the dateyour petition was filed in bankruptcy;

13. If the debtor acquires an interest in property within 180 days after the date offiling of the petition (a) by request, devise or inheritance, (b) as a result of aproperty settlement agreement with the debtor's spouse or of an interlocutory orfinal decree, or (c) as a beneficiary of a life insurance policy or of a death benefit,the chapter 7 trustee must be notified immediately.

14. Bring you current driver's license or other picture ID, such as the OhioIdentification card or any other ID that has your name, photograph and socialsecurity number on it.

ATTACHMENT 2

III

I

Proposed Form 21. Disclosure of Compensation of Attorney for Debtor

Form 21. DISCLOSURE OF COMPENSATION OF ATTORNEY FOR DEBTOR(S)

[Caption as in Form 16B.]

A. Compensation for current case:

1. Pursuant to II U.S.C. § 329(a) and Bankruptcy Rule 2016(b), I certify that Iam the attorney for the above-named debtor(s) and that compensation paid tome within one year before the filing of the petition in bankruptcy, or agreed tobe paid to me, for services rendered or to be rendered on behalf of the debtor(s)in contemplation of or in connection with the bankruptcy case is as follow:

For legal services, I have agreed to accept .............. $Prior to the filing of this statement I have received.. $B alance D ue ............................................................. $ -

2. Expenses for the current case: I certify that I have received the followingamounts for payment of expenses:

O Filing F ee ........................................................... $0L O ther (specify) ............................................. $

3. The source of the compensation and expenses paid to me for the current casewas:

o Debtor's wages, earnings or services rendered by debtor.If debtor rendered services as compensation, please state thedetails of what was done by the debtor and the value of theservices:

O Other (Specify, e.g., tax refund, proceeds from sale of stock orname and address of person providing the funds):

4. The source of compensation to be paid to me is:O Debtor's Chapter 13 plan.1o Other (Specify, e.g., tax refund, proceeds from sale of stock or


5. Other than as disclosed above, I have received no transfer, assignment orpledge of property, outright or in trust, from, or on behalf of the debtor, except:

6. In regard to ll U.S.C. § 504:

El I have not agreed to share the above-disclosed compensation with anyother person unless they are members and associates of my law firm.

El I have agreed to share the above-disclosed compensation with a personor persons who are not members or associates of my law firm. Theamount paid or to be paid along with the name and address of theperson or entity with whom the compensation is shared is set forthbelow. In addition, a copy of the compensation sharing agreement isattached.Name:Address:Amount: $

7. In return for the above-disclosed fees, I have agreed to render legal service forall aspects of this bankruptcy case, including:

a. Analysis of the debtor's financial situation, and rendering advice to thedebtor in determining whether to file a petition in bankruptcy;

b. Preparation and filing of any petition, schedules, statement of affairs andplan which may be required;

c. Representation of the debtor at the meeting of creditors andconfirmation hearing, and any adjourned hearings thereof,

d. Representation of the debtor in adversary proceedings and othercontested bankruptcy matters;

e. Specify other:

8. By agreement with the debtor(s), the above-disclosed fee does not include thefollowing services:

B. Previous compensation:

I1. In the year prior to the filing of this bankruptcy case, the debtor or another onbehalf of the debtor has directly or indirectly paid to me the amount of$ for other debt counseling or representation in bankruptcy cases.

2. In the year prior to the filing of this bankruptcy case, the debtor or another onbehalf of the debtor has directly or indirectly paid to me the amount of$ for other legal representation and advice.

CERTIFICATION

I certify that the foregoing is a complete statement of any agreement or arrangementfor payment of legal fees and expenses for representation of the debtor(s) in this bankruptcyproceeding.

Dated:

Signature of Attorney

Name of Law Firm

Dated:Signature of Debtor

Dated:

Signature of Joint Debtor

ATTACHMENT 3

1 lb e

Memorandum

Subje=t Daze

727(a)(8) July 15, 2003

TO

Martha Davis W a CPrincipal Deputy Director TrusteeEOUST Re Vn

At our meeting in San Francisco last week, you inquired regarding the streamlined procedurewe have adopted in Dallas to prevent the issuance of discharges in situations wherein the debtor isineligible to receive one under 727(a)(8). Rather than drafting, filing and serving a complaint,followed by a motion for summaryjudgment, our court has agreed to issue an OSC on our motionin such situations. I have attached a copy of a letter from Chief Judge Felsenthal in Dallas confirmingthe procedure, as well as a sample motion used in one such situation. This shortcut has proven to bea timesaver for our staff without in any significant way infringing upon the procedural safeguardswhich an adversary proceeding provides.

WTN:jss

Attachment

Al Ii ' i ti .'i .tnt L 1J:11id' r uptcu (c!io 'tNorthlen Disirict of Texas

U.S. CourthouseI100 Commerce Street

Dallas. Texas 75242-1496(!I l..a u 'brs of CI•, LI"I*

A•,kL -. _YJ wtlia.•nlll (214) 753-2040

Qlhi'f 31uti•,. August 19, 2002

William T. Neary, United StatesTrustee for the Northern District of Texas

1100 Commerce St., 9th FloorDallas, TX 75242

Dear Bill:

At the judges meeting on August 13, 2002, we determined:

(1) For a debtor who has received a discharge in a case under Title 11 within six years ofa new case, the debtor's ineligibility for a discharge should be raised by the entry of an order toshow cause, thereby giving the debtor notice and an opportunity to be heard. When your officediscovers such a case, please bring it to our attention with a request for the entry of an order toshow cause, with a draft order.

(2) For Chapter 13 trustee's final report and account to creditors, the trustee must providenotice to all the creditors. Please communicate this decision to the Standing Chapter 13 Trustees.I understand that previously two of the four trustees provided notice to all creditors and thatrecently the other two have agreed to do likewise.

Thank you for your assistance.

Sincerely.

Steven A. FelsenthalChief United States Bankruptcy Judge

SAF:as

cc: Hon. Robert C. McGuireHon. Barbara J. HouserHon. Robert L. JonesHon. D.M. LynnHon. Harold C. AbramsonTawana Marshall

United States Department of JusticeOffice of the United States Trustee1100 Commerce Street, Room 976Dallas, TX 75242 (214) 767-8967

Mary Frances Durham,for the United States Trustee

IN THE UNITED STATES BANKRUPTCY COURTFOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

IN RE: §§

JACQUELINE YVONNE SMITH § CASE NO: 02-35882-BJH-7§

Debtor § Chapter 7

Hearing: No hearing required

Motion for an Order to Show CauseRegarding Eligibility for a Discharge

Comes now the United States Trustee and files this his Motion for an Order to Show

Cause Regarding Eligibility for a Discharge in the above-referenced chapter 7 case. In support of

his Motion for an Order to Show Cause, the United States Trustee respectfully represents as

follows:

Jurisdiction

The bankruptcy court has jurisdiction to determine this matter under 28 U.S.C. §§ 1334

and 157, and 11 U.S.C. §§ 105 and 727(a)(8). This is a core proceeding under 28 U.S.C.

§ 157(b).

Facts

1. The debtor filed this voluntary chapter 7 case on July 10, 2002. The first meeting of

creditors was held August 16, 2002, and the debtor is scheduled to be discharged on October 15,

Page 1 of 2

2002.

2. The debtor filed a previous voluntary chapter 7 petition on November 6, 1996, and

received a chapter 7 discharge on March 19, 1997, Bankruptcy Case No. 96-38251-RCM-7.

3. The debtor employed the same attorney for both cases.

Arument

4. The debtor is not eligible for a discharge in this case because she was granted a

discharge in a case commenced within six years of the filing of the pending case. 11 U.S.C.

§ 727(a)(8).

Relief Requested

5. The United States Trustee asks the court to set a Show Cause Hearing and order the

debtor to appear and show cause why she should be granted a discharge in the pending case. The

United States Trustee asks for any further relief to which he may be justly entitled.

August 26, 2002 William T. NearyUnited States Trustee

Mary Frances Durham, TXB #00790144United States Department of JusticeOffice of the United States Trustee1100 Commerce Street, Room 976Dallas, TX 75242 (214) 767-8967, ext. 241

Certificate of Service

I hereby certify that I mailed a copy of the foregoing document by first class United Statesmail, postage prepaid, on August 27, 2002, to the following:

Jacqueline Yvonne Smith, 6444 Wanklyn Street, Dallas TX 75237J. Vernon Johnson, Jr., 2730 N. Stemmons Freeway, Stemmons Tower West Suite 501, DallasTX 75207Cunningham, Jim, 6412 Sondra, Dallas, TX 75214

Mary Frances Durham

Page 2 of 2

IN THE UNITED STATES BANKRUPTCY COURTFOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

IN RE: §

§JACQUELINE YVONNE SMITH § CASE NO: 02-35882-BJH-7

§Debtor § Chapter 7

Hearing: September 19, 20021:15 p.m.

Order for the Debtor to Appear and Show CauseRegarding Eligibility for a Dischar!ge

Came on for consideration, the United States Trustee's Motion for an Order to Show

Cause Regarding Eligibility for a Discharge in the above-referenced chapter 7 case. The United

States Trustee asserted that the debtor is ineligible for a discharge because she received a

discharge on March 19, 1997, in Bankruptcy Case No. 96-38251 -RCM-7, which she filed on

November 6, 1996. It would appear that the debtor is ineligible to receive a discharge in this

case, and therefore, the court hereby

ORDERS Jacqueline Yvonne Smith to appear in the United States Court House, United

States Bankruptcy Court Room at 1100 Commerce Street, 14' Floor, Dallas, Texas, 75242 on

SEPTEMBER 19, 2002 AT 1:15 P.M. and show cause why she should be granted a discharge

in this case; the court further

ORDERS that should Jacqueline Yvonne Smith fail to appear or show cause why she is

eligible for a discharge, the clerk shall not enter a discharge in this case.

Date:

United States Bankruptcy Judge

B 203(12/94)

United States Bankruptcy Court

District Of

In re

Case No.

Debtor Chapter

DISCLOSURE OF COMPENSATION OF ATTORNEY FOR DEBTOR

1. Pursuant to 11 U.S.C. § 329(a) and Fed. Bankr. P. 2016(b), I certify that I am the attorney for the above-

named debtor(s) and that compensation paid to me within one year before the filing of the petition inbankruptcy, or agreed to be paid to me, for services rendered or to be rendered on behalf of the debtor(s)

in contemplation of or in connection with the bankruptcy case is as follows:

For legal services, I have agreed to accept ................................... $

Prior to the filing of this statement I have received ............................. $

B alance D ue ......................................................... $

2. The source of the compensation paid to me was:

El Debtor El Other (specify)

3. The source of compensation to be paid to me is:

El Debtor El Other (specify)

4. El I have not agreed to share the above-disclosed compensation with any other person unless they aremembers and associates of my law firm.

El I have agreed to share the above-disclosed compensation with a other person or persons who are notmembers or associates of my law firm. A copy of the agreement, together with a list of the namesofthe people sharing in the compensation, is attached.

5. In return for the above-disclosed fee, I have agreed to render legal service for all aspectsof the bankruptcycase, including:

a. Analysis of the debtor's financial situation, and rendering advice to the debtor in determining whetherto file a petition in bankruptcy;

b. Preparation and filing of any petition, schedules, statements of affairs and plan which may be required;

c. Representation of the debtor at the meeting of creditors and confirmation hearing, and any adjournedhearings thereof;

DISCLOSURE OF COMPENSATION OF ATTORNEY FOR DEBTOR (Continued)

d. Representation of the debtor in adversary proceedings and other contested bankruptcy matters;

e. [Other provisions as needed]

6. By agreement with the debtor(s), the above-disclosed fee does not include the following services:

CERTIRCATION

I certify that the foregoing is a complete statement of any agreement or arrangement forpayment to me for representation of the debtor(s) in this bankruptcy proceedings.

Date Signature of Attorney

Name of law firm

MEMORANDUM

DATE: March 10, 2004

FROM: Patricia S. Ketchum

SUBJECT: Proposed Amendment to Form 6-I, Current Income of Individual Debtor(s)

TO: Advisory Committee on Bankruptcy Rules, Subcommittee on Forms

At the September 2003 meeting the Committee decided in principle to amend Form 6-I,the schedule of current income of individual debtor(s) to require a debtor to disclose the currentmonthly income of a nonfiling spouse in every chapter. At present, the form requires thenonfiling spouse's income to be disclosed only in a case filed under chapter 12 or chapter 13.The proposal to amend the form was included in the group of amendments to the rules and forms

submitted by the Executive Office for United States Trustees. The amendment to Schedule I,Current Income of Individual Debtor(s) and a draft Committee Note are attached.

Schedule I, however, is not the only place in the official forms where the income of anonfiling spouse must be disclosed. The Statement of Financial Affairs (Form 7), containslanguage almost identical to that used in Schedule I in 12 of the first 13 questions on thestatement form. For example, in question 1, which is titled "Income from employment oroperation of business," the following sentence is used: "(Married debtors filing under chapter 12or chapter 13 must state income of both spouses whether or not a joint petition is filed, unless thespouses are separated and a joint petition is not filed.)". Does it make sense to require disclosure

of a nonfiling spouse's current monthly income when we do not require disclosure of thenonfiling spouse's yearly income or role in the other matters covered in the Statement of

Financial Affairs?

The time period for which income information is requested on the statement of financial

affairs, however, is the two years prior to filing. In other questions on the statement, thereachback period varies from 90 days to two years. The longer time periods covered by thestatement of financial affairs raise a number of issues concerning how much information a debtorshould be required to disclose about the financial circumstances of a nonfiling spouse. If the

spouses were not married during the entire period covered by a particular question, is itappropriate to ask for any information relating to the nonfiling individual? Is the informationrequested in some of the questions properly relevant in a chapter 11 case filed by an individualbut not in a chapter 7 case? Of the first 13 questions on the statement form, the only one whichdoes not ask for information about the nonfiling spouse is question 9, "Payments related to debtcounseling or bankruptcy." Should a request for disclosure about such payments by a nonfilingspouse be added to question 9? Should the subcommittee undertake to propose requiring

disclosures concerning the nonfiling spouse on at least some of the matters covered in thestatement of financial affairs? Or if requiring disclosure of only the spouse's current monthly

income -- without the other information about the spouse's financial history-- does make sense,

what should we add to the Committee Note to Schedule I about why it does?

For quick reference, the first 13 questions on the statement of financial affairs and time

periods for which information is requested are as follows:

0 1) income from business or employment, 2 years prior to filing;

* 2) income from other sources, 2 years prior to filing;

* 3) preferential payments, 90 days prior to filing or 1 year if to an insider;

0 4) suits, seizures, garnishments, 1 year prior to filing;

0 5) repossessions, foreclosures, etc., 1 year prior to filing;

0 6) assignments, 120 days prior to filing; receiverships, 1 year prior to filing;

* 7) gifts, 1 year prior to filing;

* 8) losses, 1 year or since commencement of case;

* 9) payments for debt counseling or bankruptcy (advice), 1 year prior to filing;

* 10) other transfers, 1 year prior to filing;

0 11) closed financial accounts, 1 year prior to filing;

* 12) safe deposit boxes, 1 year prior to filing, and

• 13) setoffs, 90 days prior to filing.

The first five pages of the Statement of Financial Affairs, containing questions 1 through 13, are

attached.

Attachments

Form B614&4J+- C,2/oq)In re

Case No.Debtor (if known)

SCHEDULE I - CURRENT INCOME OF INDIVIDUAL DEBTOR(S)The column labeled "Spouse" must be completed in all cases filed by joint debtors and by a married debtor whether or nota joint petition is filed, unless the spouses are separated and a joint petition is not filed.

Debtor's Marital DEPENDENTS OF DEBTOR AND SPOUSEStatus:

RELATIONSHIP T GE

Employment: DEBTOR SPOUSEOccupationName of EmployerHow long employedAddress of Employer

Income: (Estimate of average monthly income) DEBTOR SPOUSECurrent monthly gross wages, salary, and commissions

(pro rate if not paid monthly.) $ $Estimated monthly overtime $ $

SUBTOTAL$

LESS PAYROLL DEDUCTIONSa. Payroll taxes and social security $ $b. Insurance $ $c. Union dues $ $d. Other (Specify: $ $

SUBTOTAL OF PAYROLL DEDUCTIONS $ $TOTAL NET MONTHLY TAKE HOME PAY $ $

Regular income from operation of business or profession or farm $(attach detailed statement)Income from real property $ $Interest and dividends $ $Alimony, maintenance or support payments payable to the debtor for thedebtor's use or that of dependents listed above. $ $Social security or other government assistance(Specify) $ $Pension or retirement income $ $Other monthly income $ $(Specify) $ $

$ $ _ _

TOTAL MONTHLY INCOME $ $ _

TOTAL COMBINED MONTHLY INCOME $_ (Report also on Summary of Schedules)

Describe any increase or decrease of more than 10% in any of the above categories anticipated to occur within the year following the filing ofthis document:

Form 6

2004 COMMITTEE NOTE

Schedule I (Current Income of Individual Debtor(s)) is amended to require a marrieddebtor filing under any chapter of the Code to complete the column labeled "Spouse" whether ornot a joint petition is filed, unless the spouses are separated and a joint petition is not filed.Disclosure of a nonfiling spouse's income in a chapter 7 case will help the United States trusteeto determine whether to file a motion under section 707(b) of the Code. In a chapter 11 casefiled by an individual, the disclosure will help creditors determine whether the plan is fair andequitable as required by § 1129(b) of the Code.

Form 7(12/03)

FORM 7. STATEMENT OF FINANCIAL AFFAIRS


DISTRICT OF

In re: Case No.(Name) (if known)

Debtor

STATEMENT OF FINANCIAL AFFAIRS

This statement is to be completed by every debtor. Spouses filing a joint petition may file a single statement on whichthe information for both spouses is combined. If the case is filed under chapter 12 or chapter 13, a married debtor must furnishinformation for both spouses whether or not ajoint petition is filed, unless the spouses are separated and ajoint petition is notfiled. An individual debtor engaged in business as a sole proprietor, partner, family farmer, or self-employed professional,should provide the information requested on this statement concerning all such activities as well as the individual's personalaffairs.

Questions 1 - 18 are to be completed by all debtors. Debtors that are or have been in business, as defined below, alsomust complete Questions 19 - 25. If the answer to an applicable question is "None," mark the box labeled "None." Ifadditional space is needed for the answer to any question, use and attach a separate sheet properly identified with the case name,case number (if known), and the number of the question.

DEFINITIONS

"In business." A debtor is "in business" for the purpose of this form if the debtor is a corporation or partnership. Anindividual debtor is "in business" for the purpose of this form if the debtor is or has been, within the six years immediatelypreceding the filing of this bankruptcy case, any of the following: an officer, director, managing executive, or owner of 5 percentor more of the voting or equity securities of a corporation; a partner, other than a limited partner, of a partnership; a soleproprietor or self-employed.

"Insider." The term "insider" includes but is not limited to: relatives of the debtor; general partners of the debtor andtheir relatives; corporations of which the debtor is an officer, director, or person in control; officers, directors, and any owner of 5percent or more of the voting or equity securities of a corporate debtor and their relatives; affiliates of the debtor and insiders ofsuch affiliates; any managing agent of the debtor. 11 U.S.C. § 101.

1. Income from employment or operation of business

None State the gross amount of income the debtor has received from employment, trade, or profession, or from operation ofE] the debtor's business from the beginning of this calendar year to the date this case was commenced. State also the gross

amounts received during the two years immediately preceding this calendar year. (A debtor that maintains, or hasmaintained, financial records on the basis of a fiscal rather than a calendar year may report fiscal year income. Identifythe beginning and ending dates of the debtor's fiscal year.) If a joint petition is filed, state income for each spouseseparately. (Married debtors filing under chapter 12 or chapter 13 must state income of both spouses whether or not ajoint petition is filed, unless the spouses are separated and a joint petition is not filed.)

AMOUNT SOURCE (if more than one)

22. Income other than from employment or operation of business

None State the amount of income received by the debtor other than from employment, trade, profession, or operation of theEl debtor's business during the two years immediately preceding the commencement of this case. Give particulars. If ajoint petition is filed, state income for each spouse separately. (Married debtors filing under chapter 12 or chapter 13must state income for each spouse whether or not ajoint petition is filed, unless the spouses are separated and a jointpetition is not filed.)

AMOUNT SOURCE

3. Payments to creditors

None a. List all payments on loans, installment purchases of goods or services, and other debts, aggregating more thanE3 $600 to any creditor, made within 90 days immediately preceding the commencement of this case. (Marrieddebtors filing under chapter 12 or chapter 13 must include payments by either or both spouses whether or not ajoint petition is filed, unless the spouses are separated and a joint petition is not filed.)

NAME AND ADDRESS OF CREDITOR DATES OF AMOUNT AMOUNTPAYMENTS PAID STILL OWING

None b. List all payments made within one year immediately preceding the commencement of this case to or for theEl benefit of creditors who are or were insiders. (Married debtors filing under chapter 12 or chapter 13 must includepayments by either or both spouses whether or not a joint petition is filed, unless the spouses are separated and ajoint petition is not filed.)

NAME AND ADDRESS OF CREDITOR DATE OF AMOUNT AMOUNTAND RELATIONSHIP TO DEBTOR PAYMENT PAID STILL OWING

4. Suits and administrative proceedings, executions, garnishments and attachments

None a. List all suits and administrative proceedings to which the debtor is or was a party within one year immediatelyEl preceding the filing of this bankruptcy case. (Married debtors filing under chapter 12 or chapter 13 must includeinformation concerning either or both spouses whether or not a joint petition is filed, unless the spouses areseparated and a joint petition is not filed.)

CAPTION OF SUIT COURT OR AGENCY STATUS ORAND CASE NUMBER NATURE OF PROCEEDING AND LOCATION DISPOSITION

None b. Describe all property that has been attached, garnished or seized under any legal or equitable process within oneEl year immediately preceding the commencement of this case. (Married debtors filing under chapter 12 or chapter13 must include information concerning property of either or both spouses whether or not a joint petition is filed,unless the spouses are separated and ajoint petition is not filed.)

NAME AND ADDRESS DESCRIPTIONOF PERSON FOR WHOSE DATE OF AND VALUE OFBENEFIT PROPERTY WAS SEIZED SEIZURE PROPERTY

5. Repossessions, foreclosures and returns

None List all property that has been repossessed by a creditor, sold at a foreclosure sale, transferred through a deed in lieuEl of foreclosure or returned to the seller, within one year immediately preceding the commencement of this case.(Married debtors filing under chapter 12 or chapter 13 must include information concerning property of either or bothspouses whether or not a joint petition is filed, unless the spouses are separated and a joint petition is not filed.)

DATE OF REPOSSESSION, DESCRIPTIONNAME AND ADDRESS FORECLOSURE SALE, AND VALUE OFOF CREDITOR OR SELLER TRANSFER OR RETURN PROPERTY

6. Assignments and receiverships

None a. Describe any assignment of property for the benefit of creditors made within 120 days immediately preceding theE] commencement of this case. (Married debtors filing under chapter 12 or chapter 13 must include any assignment

by either or both spouses whether or not a joint petition is filed, unless the spouses are separated and a jointpetition is not filed.)

TERMS OFNAME AND ADDRESS DATE OF ASSIGNMENTOF ASSIGNEE ASSIGNMENT OR SETTLEMENT

None b. List all property which has been in the hands of a custodian, receiver, or court-appointed official within one yearEl immediately preceding the commencement of this case. (Married debtors filing under chapter 12 or chapter 13must include information concerning property of either or both spouses whether or not a joint petition is filed,unless the spouses are separated and a joint petition is not filed.)

NAME AND LOCATION DESCRIPTIONNAME AND ADDRESS OF COURT DATE OF AND VALUE OFOF CUSTODIAN CASE TITLE & NUMBER ORDER PROPERTY

7. Gifts

None List all gifts or charitable contributions made within one year immediately preceding the commencement of this caseEl except ordinary and usual gifts to family members aggregating less than $200 in value per individual family member

and charitable contributions aggregating less than $100 per recipient. (Married debtors filing under chapter 12 orchapter 13 must include gifts or contributions by either or both spouses whether or not a joint petition is filed, unlessthe spouses are separated and a joint petition is not filed.)

NAME AND ADDRESS RELATIONSHIP DESCRIPTIONOF PERSON TO DEBTOR, DATE AND VALUEOR ORGANIZATION IF ANY OF GIFT OF GIFT

8. Losses

None List all losses from fire, theft, other casualty or gambling within one year immediately preceding the commencementEl of this case or since the commencement of this case. (Married debtors filing under chapter 12 or chapter 13 must

include losses by either or both spouses whether or not a joint petition is filed, unless the spouses are separated and ajoint petition is not filed.)

DESCRIPTION DESCRIPTION OF CIRCUMSTANCES AND, IFAND VALUE OF LOSS WAS COVERED IN WHOLE OR IN PART DATE OFPROPERTY BY INSURANCE, GIVE PARTICULARS LOSS

9. Payments related to debt counseling or bankruptcy

None List all payments made or property transferred by or on behalf of the debtor to any persons, including attorneys, forE] consultation concerning debt consolidation, relief under the bankruptcy law or preparation of a petition in bankruptcywithin one year immediately preceding the commencement of this case.

DATE OF PAYMENT, AMOUNT OF MONEY ORNAME AND ADDRESS NAME OF PAYOR IF DESCRIPTION AND VALUEOF PAYEE OTHER THAN DEBTOR OF PROPERTY

10. Other transfers

None List all other property, other than property transferred in the ordinary course of the business or financial affairs ofI] the debtor, transferred either absolutely or as security within one year immediately preceding the commencement of

this case. (Married debtors filing under chapter 12 or chapter 13 must include transfers by either or both spouseswhether or not a joint petition is filed, unless the spouses are separated and a joint petition is not filed.)

DESCRIBE PROPERTYNAME AND ADDRESS OF TRANSFEREE, TRANSFERREDRELATIONSHIP TO DEBTOR DATE AND VALUE RECEIVED

511. Closed financial accounts

None List all financial accounts and instruments held in the name of the debtor or for the benefit of the debtor which were[I] closed, sold, or otherwise transferred within one year immediately preceding the commencement of this case. Includechecking, savings, or other financial accounts, certificates of deposit, or other instruments; shares and share accountsheld in banks, credit unions, pension funds, cooperatives, associations, brokerage houses and other financialinstitutions. (Married debtors filing under chapter 12 or chapter 13 must include information concerning accounts orinstruments held by or for either or both spouses whether or not a joint petition is filed, unless the spouses areseparated and a joint petition is not filed.)

TYPE OF ACCOUNT, LAST FOUR AMOUNT ANDNAME AND ADDRESS DIGITS OF ACCOUNT NUMBER, DATE OF SALEOF INSTITUTION AND AMOUNT OF FINAL BALANCE OR CLOSING

12. Safe deposit boxes

None List each safe deposit or other box or depository in which the debtor has or had securities, cash, or other valuablesI] within one year immediately preceding the commencement of this case. (Married debtors filing under chapter 12 orchapter 13 must include boxes or depositories of either or both spouses whether or not a joint petition is filed, unlessthe spouses are separated and a joint petition is not filed.)

NAME AND ADDRESS NAMES AND ADDRESSES DESCRIPTION DATE OF TRANSFEROF BANK OR OF THOSE WITH ACCESS OF OR SURRENDER,OTHER DEPOSITORY TO BOX OR DEPOSITORY CONTENTS IF ANY

13. Setoffs

None List all setoffs made by any creditor, including a bank, against a debt or deposit of the debtor within 90 days precedingEl the commencement of this case. (Married debtors filing under chapter 12 or chapter 13 must include informationconcerning either or both spouses whether or not a joint petition is filed, unless the spouses are separated and ajoint

petition is not filed.)

DATE OF AMOUNT OFNAME AND ADDRESS OF CREDITOR SETOFF SETOFF

14. Property held for another person

None List all property owned by another person that the debtor holds or controls.E]

NAME AND ADDRESS DESCRIPTION AND VALUEOF OWNER OF PROPERTY LOCATION OF PROPERTY

15. Prior address of debtor

MEMORANDUM



RE: RULE 3007 AND REQUESTS FOR RELIEF

DATE: MARCH 8,2004

Rule 3007 governs objections to claims. In most instances, a party in interest files an

objection to a claim and the matter proceeds as a contested matter under Rule 9014.1 The rule,

however, recognizes that in many instances, the objection to the claim is joined with a request for

relief of a kind set out in Rule 7001. Thus, the objection to claim, a contested matter, is joined

with an adversary proceeding. In that event, Rule 3007 currently provides that "If an objection to

a claim is joined with a demand for relief of a kind specified in Rule 7001, it becomes an

adversary proceeding."

The language of the rule thus suggests that the inclusion of a certain demand for relief

transforms the contested matter into an adversary proceeding. The rule does not, however,

provide any direction as to the consequences of the transformation. That is, the rule does not

direct the objector to comply with the provisions of Part VII of the rules. Instead, its silence

could be understood as simply deeming the action to be an adversary proceeding without

requiring compliance with the provisions of Part VII particularly as regards the commencement

of the action. A simple and common example illustrates the problem.

1 Rule 9013 suggests that the objection should be in the form of a motion, but the

practice is to denominate the pleading as an "objection to claim." This is arguably consistentwith Rule 9014(a) in that Rule 3007 "otherwise governs" the matter and a motion is therefore notrequired under Rule 9014(a).

1

A creditor files a proof of claim asserting a security interest in a chapter 7 debtor's motor

vehicle. The claim includes the amount of the indebtedness claimed, and it includes unmatured

interest in the amount of the claim. The outstanding indebtedness exceeds the value of the motor

vehicle, so the future interest is objectionable under § 502(b)(2). This objection would be raised

under Rule 3007, and it would initiate a contested matter. However, the trustee asserts that the

creditor failed to perfect its interest in the motor vehicle under the applicable state law. This

assertion challenges the validity of the lien and should be pursued under Rule 7001(2) as an

adversary proceeding. Rule 3007 provides that while the objection that the trustee files would

seem to initiate a contested matter, the fact that it challenges the creditor's asserted lien

transforms the contested matter into an adversary proceeding. See, e.g., In re Octagon Roofing,

156 B.R. 214, 218 (Bankr. N.D. Il. 1993) (when trustee filed objection to claim and asserted

strong-arm avoidance power in alleging that creditor failed to perfect lien, action became an

adversary proceeding and separate filing of a complaint was unnecessary).

Under Rule 9014(b), the service of the objection to the claim must meet the requirements

of service of a complaint under Rule 7004. Thus, the creditor whose claim is being challenged

receives service of the documents in the same manner whether the action starts as a contested

matter or if it is commenced by the filing of a complaint as an adversary proceeding. The only

consequence to "transforming" a contested matter into an adversary proceeding is that the

litigation proceeds under the full application of Part VII of the Rules rather than under the partial

application of those rules to the extent that Rule 9014(c) provides. The transformation thus

eliminates the need for the objection to be refiled as a complaint in order to continue the matter

as an adversary proceeding.

2

Rule 3007 is derived from § 48a(8) of the Bankruptcy Act and former Bankruptcy Rule

306. In fact, the last sentence of Rule 3007 is taken nearly verbatim from former Rule 306.

Thus, the concept that an objection to a claim that includes a request for relief of a kind specified

in the adversary proceeding rule has been in the rules for many years. It has always operated

simply to transform the contested matter to an adversary proceeding. Permitting the

transformation has the salutary effect of allowing the action to go forward under the appropriate

set of rules rather than requiring a new start to the action. See, e.g., Halverson v. Cameron (In re

Mathiason), 16 F.3d 234 ( 8th Cir. 1993); In re Octagon Roofing, 156 B.R. 214 (Bankr. N.D. Ill.

1993). On the other hand, the case proceeding as an adversary proceeding may catch a party by

surprise and result in a more complete resolution of the matter than was anticipated. Mathiason,

16 F.3d at 238 (trustee's failure to raise a challenge to joint tenancy status in an objection to a

claim that included a request for a determination of the extent of a lien results in a waiver of that

claim). Perhaps the rule could be more explicit in its statement of the effect of transforming a

contested matter into an adversary proceeding. For example, Rule 7013 applies in adversary

proceedings, but it does not apply in contested matters. Consequently, a party that expects the

action to be a contested matter may conclude that compulsory counterclaims need not be

asserted. If the action goes forward as an adversary proceeding, however, Rule 7013 would

apply and compulsory counterclaims would have to be raised.

This is a result of a party misunderstanding or ignoring the final sentence of Rule 3007.

This problem could be resolved by requiring a separate filing for objections to claims and for

adversary proceedings. If Rule 3007 is limited to objections to claims that are contested matters,

no misunderstanding will follow. This would require, however, that an objection to a claim that

3

included a request for relief would be dismissed as improper under Rule 3007. There would also

need to be some provision governing the impact of a decision on the matter if the creditor failed

to raise an objection to proceeding under the incorrect rule. The rule as currently drafted avoids

these problems by deeming the action to be an adversary proceeding. The action proceeds with

the full set of Part VII rules applying.

It may improve the rule to set apart in the rule the directive that the otherwise contested

matter is deemed an adversary proceeding. The rule could be more explicit in describing the

impact of the rule's providing that the action "becomes an adversary proceeding." A possible

revision of Rule 3007 follows.

Rule 3007 Objections to Claims

1 Ua An objection to the allowance of a claim shall be in writing and

2 filed. A copy of the objection with notice of the hearing thereon

3 shall be mailed or otherwise delivered to the claimant, the debtor or

4 debtor in possession and the trustee at least 30 days prior to the

5 hearing.

6 (2) If an objection to a claim is joined with a demand for relief of

7 the kind specified in Rule 7001, the action becomes an adversary

8 proceeding, the objection is deemed to be a complaint, and all of

9 Part VII of these Rules apply to the action it be-m an advers.ary

10 procceding.

COMMITTEE NOTE

An objection to a claim initiates a contested matter. If,

4

however, the objection includes also a request for relief of a kindspecified in Rule 7001, the contested matter automatically becomesan adversary proceeding. The rule is amended to highlight that theobjection that was filed to commence the contested matter isdeemed to be a complaint and that the action goes forward as anadversary proceeding. As a result, all of Part VII of the rules applyto the action. The court can enter any order or take any action itcould take in any other adversary proceeding.

The amendment to the rule is relatively minor and is not intended to make any substantive

change in the rule. Another possible solution would be to revise the rule to require the party

filing the objection that includes a request for adversary proceeding type of relief to file a

complaint separate from the objection, but such an amendment would not likely solve the

problem. The provision in the existing rule as well as the proposed subdivision (b) above

recognize that parties will continue to combine objections to claims with requests for relief that

are specified in Rule 7001. Thus, it seems that introducing a requirement that the objector file a

separate complaint would be ineffectual. The parties that file such compound objections do so in

apparent ignorance of Rule 7001. Rather than force these parties to refile the pleadings, the

current rule instead attempts to make the best of the situation by permitting the actions to go

forward without requiring the second filing of essentially the same document. Consequently, it

does not seem appropriate to amend the rule to require the separate filing of a complaint.

Moreover, unless the Committee believes that an amendment to the rule is necessary to provide

essential clarification, it seems that no change is needed to Rule 3007.

5

MEMORANDUM



RE: RULE 7054 AMENDMENT TO CONFORM TO AMENDMENTS TO CIVIL

RULES 7023 AND 7054

Professor Resnick raised an issue for consideration of the Committee due to a recent

amendment of the Civil Rules. Currently, Bankruptcy Rule 7054(a) provides that Rule 54(a)-(c)

apply in adversary proceedings. Rule 54(d), however, does not apply in adversary proceedings.

That subdivision governs the award of costs and attorney fees in the absence of some other

statutory directive. In class actions in bankruptcy cases, on the other hand, the award of costs are

governed by Rule 7054(b).

Effective December 1, 2003, Rule 23 F. R. Civ. P. was amended to add new subdivisions

(g) and (h). A copy of the revised portions of the rule is set out immediately after this

memorandum. Rule 23(h) establishes new procedures for the award of attorney fees in class

actions. Bankruptcy Rule 7023 provides that all of Rule 23 applies in adversary proceedings.

Therefore, the new Rule 23(h) seems to apply in adversary proceedings. This new subdivision in

Rule 23(h) provides that Rule 54(d) applies to awards of attorney fees in class actions. Thus, the

Bankruptcy Rules exclude Civil Rule 54(d) from adversary proceedings, but Rule 7023 would

reintroduce Civil Rule 54(d)(2) into adversary proceedings through the cross reference contained

in new Civil Rule 23(h).

The revisions of Civil Rule 23 that became effective on December 1, 2003, were

promulgated after long study and significant debate. Therefore, adoption of the process created

1

by those amendments seems most proper when limited to application in class actions. That

requires an amendment to Bankruptcy Rule 7054 to allow Civil Rule 54(d) to apply in class

actions. The absence of such an amendment leaves the Bankruptcy Rules inconsistent in that

Rule 7054 states that Rule 54(d) does not apply in adversary proceedings, but Rule 7023 would

incorporate Rule 54(d) by its wholesale adoption of Rule 23. Therefore, I would suggest that the

Committee recommend to the Standing Committee that Rule 7054 be amended to provide

explicitly that Civil Rule 54(d)(2) applies in adversary proceedings that are class actions. This

would have the effect of treating these issues identically in class actions whether they are

proceeding in a bankruptcy court or a district court. The amendment to Rule 7054 to accomplish

this result is set out below.

Rule 7054. Judgments; Costs

I (a) JUDGMENTS. Rule 54(a)-(c) F. R. Civ. P. applies in

2 adversary proceedings. Except as provided in Rule 7023, Rule

3 54(d) F. R. Civ. P. does not apply in adversary proceedings.

4

COMMITTEE NOTE

The promulgation of the amendments including Rule 23(h)F. R. Civ. P. makes amendment of Bankruptcy Rule 7054(a)necessary. Rule 23 is applicable in its entirety in adversaryproceedings by virtue of its incorporation by Rule 7023. Thatincorporation includes the cross reference in Rule 23(h) to Rule54(d)(2). In the absence of an amendment to Rule 7054(a),ambiguity would exist as to whether Rule 54(d) through its crossreference in Rule 23(h) would apply in adversary proceedings orwhether the exclusion of that portion of Rule 54 set out in

2

Bankruptcy Rule 7054 would prohibit application of thatsubdivision of the civil rule. This amendment provides that Rule54(d) applies only in the case of a class action proceeding underRule 7023. Thus, Rule 54(d) still is not applicable generally toadversary proceedings, but this general rule is overridden in thecase of a class action pending in the bankruptcy court.

This amendment is proposed to make the Bankruptcy Rules conform to changes in the civil

rules. It is necessary because the amendments to Rule 23 created a conflict between Bankruptcy

Rules 7023 and 7054 where none had previously existed. Since this is an amendment that is

intended only to resolve the conflict created by the civil rules amendments and is not intended to

have any substantive impact otherwise, the Committee may wish to propose the amendment to

the Standing Committee for its adoption without the need for publication and comment. This

will shorten the approval process by one year and will expedite the change necessary to make the

bankruptcy and civil rules consistent.

The other alternative to amending Rule 7054 would be to propose an amendment to Rule

7023 to provide that Rule 23(h) does not apply in adversary proceedings. This would obviate the

need to amend Rule 7054 because Civil Rule 54(d) would not be imported into Rule 7023 if

subdivision (h) of Rule 23 were specifically excluded from applying in adversary proceedings.

Amending the rule in this fashion would create a distinction in class actions in bankruptcy courts

as compared to district courts creating the potential for forum shopping. As a result, I would not

recommend this option for the Committee.

The promulgation of Rule 23(h) creates another potential conflict with the Bankruptcy Rules,

though one that is not so immediately apparent or direct. Rule 23(h)(4) authorizes the court to

refer matters to special masters and magistrate judges. Bankruptcy Rule 9031 specifically

3

provides that Rule 53 F. R. Civ. P. that govern the appointment of special masters does not apply

in bankruptcy cases. In fact, the Committee has recently reiterated its view that Rule 53 should

not be incorporated into the Bankruptcy Rules. Therefore, it seems appropriate to amend rule

7023 to clarify that Rule 23(d)(4) does not apply in adversary proceedings. An amendment to

accomplish that objective follows.

Rule 7023. Class Proceedings

With the exception of subdivision (h)(4), Rule 23 F. R. Civ. P.

2 applies in adversary proceedings.

COMMITTEE NOTE

This amendment excludes Rule 23(h)(4) from adversaryproceedings. That provision authorizes a court to refer to a specialmaster or magistrate judge the issue of the proper amount of anattorney fee award in a class action. Bankruptcy Rule 9031specifically provides that Rule 53 F. R. Civ. P. does not apply inbankruptcy cases thus effectively prohibiting the appointment of aspecial master. By making Rule 23(h)(4) inapplicable in adversaryproceedings, Rule 7023 follows the policy of Rule 9031 to bar theappointment of a special master.

The amendment is not intended to have any other affect on theapplication of Rule 23 F. R. Civ. P. in adversary proceedings, andall of the remaining provisions of that rule will apply.

As with the proposed amendment to Rule 7054, this amendment can be viewed as a

conforming amendment necessitated by the promulgation of the amendments to Civil Rule 23. If

the Committee considers this amendment to be technical and conforming, there may be no need

to publish the proposed amendment for comment, and the proposal could be recommended to the

4

Standing Committee for its adoption and recommendation to the Judicial Conference for its

transmission to the Supreme Court.

Attachment

5

AMENDMENTS TO THE FEDERAL RULESOF CIVIL PROCEDURE

Rule 23. Class Actions

(c) Determining by Order Whether to Certify a

Class Action; Appointing Class Counsel; Notice and

Membership in Class; Judgment; Multiple Classes

and Subclasses.

(1) (A) When a person sues or is sued as a

representative of a class, the court must - at an

early practicable time - determine by order

whether to certify the action as a class action.

(B) An order certifying a class action must

define the class and the class claims, issues, or

defenses, and must appoint class counsel under

Rule 23(g).

(C) An order under Rule 23(c)(1) may be

altered or amended before final judgment.

(2) (A) For any class certified under Rule 23(b)(1)

or (2), the court may direct appropriate notice to

the class.

2 FEDERAL RULES OF CIVIL PROCEDURE

(B) For any class certified under Rule 23(b)(3),

the court must direct to class members the best

notice practicable under the circumstances,

including individual notice to all members who

can be identified through reasonable effort. The

notice must concisely and clearly state in plain,

easily understood language:

" the nature of the action,

" the definition of the class certified,

" the class claims, issues, or defenses,

" that a class member may enter an

appearance through counsel if the

member so desires,

* that the court will exclude from the

class any member who requests

exclusion, stating when and how

members may elect to be excluded, and

* the binding effect of a class judgment on

class members under Rule 23(c)(3).

(3) The judgment in an action maintained as a class

action under subdivision (b)(1) or (b)(2), whether or

FEDERAL RULES OF CIVIL PROCEDURE 3

not favorable to the class, shall include and describe

those whom the court finds to be members of the

class. The judgment in an action maintained as a

class action under subdivision (b)(3), whether or not

favorable to the class, shall include and specify or

describe those to whom the notice provided in

subdivision (c)(2) was directed, and who have not

requested exclusion, and whom the court finds to be

members of the class.

(4) When appropriate (A) an action may be brought

or maintained as a class action with respect to

particular issues, or (B) a class may be divided into

subclasses and each subclass treated as a class, and

the provisions of this rule shall then be construed

and applied accordingly.

(e) Settlement, Voluntary Dismissal, or

Compromise.

(1) (A) The court must approve any settlement,

voluntary dismissal, or compromise of the

claims, issues, or defenses of a certified class.


(B) The court must direct notice in a

reasonable manner to all class members who

would be bound by a proposed settlement,

voluntary dismissal, or compromise.

(C) The court may approve a settlement,

voluntary dismissal, or compromise that would

bind class members only after a hearing and on

finding that the settlement, voluntary dismissal,

or compromise is fair, reasonable, and adequate.

(2) The parties seeking approval of a settlement,

voluntary dismissal, or compromise under Rule

23(e)(1) must file a statement identifying any

agreement made in connection with the proposed

settlement, voluntary dismissal, or compromise.

(3) In an action previously certified as a class action

under Rule 23(b)(3), the court may refuse to approve

a settlement unless it affords a new opportunity to

request exclusion to individual class members who

had an earlier opportunity to request exclusion but

did not do so.


(4) (A) Any class member may object to a proposed

settlement, voluntary dismissal, or compromise

that requires court approval under Rule

23(e)(1)(A).

(B) An objection made under Rule 23(e)(4)(A)

may be withdrawn only with the court's

approval.

(g) Class Counsel.

(1) Appointing Class Counsel.

(A) Unless a statute provides otherwise, a

court that certifies a class must appoint class

counsel.

(B) An attorney appointed to serve as class

counsel must fairly and adequately represent

the interests of the class.

(C) In appointing class counsel, the court

(i) must consider:

* the work counsel has done in

identifying or investigating

potential claims in the action,


* counsel's experience in handling

class actions, other complex

litigation, and claims of the type

asserted in the action,

" counsel's knowledge of the

applicable law, and

" the resources counsel will commit

to representing the class;

(ii) may consider any other matter

pertinent to counsel's ability to fairly and

adequately represent the interests of the

class;

(iii) may direct potential class counsel to

provide information on any subject

pertinent to the appointment and to

propose terms for attorney fees and

nontaxable costs; and

(iv) may make further orders in

connection with the appointment.


(2) Appointment Procedure.

(A) The court may designate interim counsel to

act on behalf of the putative class before

determining whether to certify the action as a

class action.

(B) When there is one applicant for

appointment as class counsel, the court may

appoint that applicant only if the applicant is

adequate under Rule 23(g)(1)(B) and (C). If

more than one adequate applicant seeks

appointment as class counsel, the court must

appoint the applicant best able to represent the

interests of the class.

(C) The order appointing class counsel may

include provisions about the award of attorney

fees or nontaxable costs under Rule 23(h).

(h) Attorney Fees Award. In an action certified as a

class action, the court may award reasonable attorney

fees and nontaxable costs authorized by law or by

agreement of the parties as follows:


(1) Motion for Award of Attorney Fees. A claim

for an award of attorney fees and nontaxable costs

must be made by motion under Rule 54(d)(2), subject

to the provisions of this subdivision, at a time set by

the court. Notice of the motion must be served on all

parties and, for motions by class counsel, directed to

class members in a reasonable manner.

(2) Objections to Motion. A class member, or a

party from whom payment is sought, may object to

the motion.

(3) Hearing and Findings. The court may hold a

hearing and must find the facts and state its

conclusions of law on the motion under Rule 52(a).

(4) Reference to Special Master or Magistrate

Judge. The court may refer issues related to the

amount of the award to a special master or to a

magistrate judge as provided in Rule 54(d)(2)(D).

§ 2403. Intervention by United States or aState; constitutional question

(a) In any action, suit or proceeding in a court ofthe United States to which the United States or anyagency, officer or employee thereof is not a party,wherein the constitutionality of any Act of Congressaffecting the public interest is drawn in question, thecourt shall certify such fact to the Attorney General,and shall permit the United States to intervene forpresentation of evidence, if evidence is otherwise ad-missible in the case, and for argument on the questionof constitutionality. The United States shall, subjectto the applicable provisions of law, have all the rightsof a party and be subject to all liabilities of a party asto court costs to the extent necessary for a properpresentation of the facts and law relating to thequestion of constitutionality.

(b) In any action, suit, or proceeding in a court ofthe United States to which a State or any agency,officer, or employee thereof is not a party, wherein theconstitutionality of any statute of that State affectingthe public interest is drawn in question, the court shallcertify such fact to the attorney general of the State,and shall permit the State to intervene for presenta-tion of evidence, if evidence is otherwise admissible inthe case, and for argument on the question of constitu-tionality. The State shall, subject to the applicableprovisions of law, have all the rights of a party and besubject to all liabilities of a party as to court costs tothe extent necessary for a proper presentation of thefacts and law relating to the question of constitutional-ity.

rI

4I

U

I

MEMORANDUM



RE: CERTIFICATION OF CONSTITUTIONAL QUESTIONS AND PROPOSED

CIVIL RULE 5.1

DATE: MARCH 8,2004

Rule 24(c) of the Federal Rules of Civil Procedure currently sets the procedure when a

party challenges the constitutionality of a federal or state statute. The rule is part of the

intervention rule, and the Civil Rules Committee has proposed new civil rule 5.1 to replace a

portion of Rule 24(c). The proposal was published for comment, and the comment period has

now passed. We expect the proposal to be presented to the Standing Committee for its approval

at the June 2004 meeting. The Committee Note to the proposed amendment states that the

Committee believes the relocation of the rule to that portion of the rules that includes the initial

filings in the case is more likely to come to the attention of parties than in its current location as a

part of the rule governing intervention.

The rule implements 28 U.S.C. § 2403 which requires the court to certify to the

appropriate state or United States Attorney General that the constitutionality of a state or federal

statute that affects the public interest has been questioned in "any action, suit or proceeding."

Proposed Rule 5.1 would require the parties to give notice to the Attorney General, and directs

the court thereafter to certify that a constitutional issue has been raised. The Rule also provides

that the United States has 60 days to intervene in the action. The 60 day period is the same as the

period provided for the United States to answer a complaint under Rule 12(a)(3)(A). Rule 12(a)

I

does not apply in adversary proceedings (although Bankruptcy Rule 7012 does import the

remaining provisions of Rule 12), and by way of contrast, Bankruptcy Rule 7012(a) establishes a

35 day period for the United States to answer a complaint. Consequently, consistent with the

intent and structure of Proposed Rule 5.1, a Proposed Bankruptcy Rule 7005.1 should adopt the

answer period set out in Rule 7012(a) as the time allowed for the United States to intervene

under Rule 7005.1.

Existing Bankruptcy Rule 7024 provides that Rule 24 F. R. Civ. P. applies in adversary

proceedings. If the civil rule is amended to delete a portion of subdivision (c) and to create a new

Rule 5.1, then the cross reference in Bankruptcy Rule 7024 to Rule 24 will be insufficient.

Therefore, if the Standing Committee accepts the recommendation of the Civil Rules Committee

to present the amended Rule 24 and new Rule 5.1 to the Judicial Conference, we will need to be

prepared to recommend a conforming amendment to the Bankruptcy Rules. A new Rule 7005.1

would provide that Rule 5.1 F. R. Civ. P. applies in adversary proceedings. Rule 9014(c) also

should be amended to add Rule 7005.1 to the list of rules applicable in contested matters. These

amendments arguably are conforming and may not need to be published for comment. In that

event, the amendments to the Bankruptcy Rules could be proposed to the Standing Committee on

a conditional basis. If the Standing Committee approves the Civil Rules amendments to Rule 24

and the promulgation of new Rule 5.1, then the Bankruptcy Rules conforming amendments

would follow.

The amendment to Rule 9014 to include Rule 7005.1 among the adversary rules that

apply in contested matters will be a change that could have significant impact in specific cases.

Rule 7024 is not applicable in contested matters, so the provisions currently in Civil Rule 24 do

2

not apply in contested matters. To the extent that a portion of former Civil Rule 24(c) will be

applicable in contested matters, the courts and parties will need to be more aware of the potential

for the need to serve attorneys general and to have the court make certifications about these

issues. For example, a party could allege that a particular state statute that governs foreclosure

may be unconstitutional either as a due process violation, or because the statute is overridden in

some manner by the Bankruptcy Code by operation of the Supremacy Clause. A myriad of other

possibilities exist as well. Making Rule 7005.1 applicable in contested matters brings the

procedural requirements into contested matters where they had not previously operated. It does

seem that making the appropriate Attorney General aware that a statute that he or she is in a

sense responsible for is both sensible and proper. Nevertheless, it does create the potential for

additional burdens on the bankruptcy court.

The necessary amendments to the Bankruptcy Rules are set out below.

Rule 7005.1 CERTIFICATION OF CONSTITUTIONALQUESTIONS.

I (a) Rule 5.1 (a), (b) and (d) F. R. Civ. P. applies in adversary

2 proceedings.

3 (b) INTERVENTION. The court shall set a time not less than 35

4 days form the Rule 5.1 (b) certification for intervention by the

5 Attorney General or State Attorney General.

COMMITTEE NOTE

3

This rule is added to conform to the promulgation of new Rule5.1 F. R. Civ. P. That rule governs the procedure when a partychallenges the constitutionality of a state or federal statute. Thecivil rule provides a 60 day period for the United States tointervene in an action. That time frame is taken from Rule12(a)(3)(A) of the civil rules. By way of contrast, Bankruptcy Rule7012(a) establishes a 35 day period for the United States to servean answer. This shorter period reflects the typically fasterresolution of adversary proceedings in bankruptcy cases ascompared to general civil litigation in the United States courts.Thus, it is appropriate to adopt a consistent time period for theUnited States to intervene in an action under Rule 7005.1 and tofile an answer under Rule 7012(a).

Rule 9014 CONTESTED MATTERS

1 •

2 (c) Unless the court directs otherwise, the following rules shall

3 apply: 7005.1 7009, 7017, 7021, 7025, 7026, 7028-7037, 7041,

4 7042, 7052, 7054-7056, 7064, 7069, and 7071. An entity that

5 desires to perpetuate testimony may proceed in the same manner as

6 provided in Rule 7027 for the taking of a deposition before an

7 adversary proceeding. The court may at any stage in a particular

8 matter direct that one or more of the other Rules in Part VII shall

9 apply. The court shall give the parties notice of any order issued

10 under this paragraph to afford them a reasonable opportunity to

11 comply with the procedures prescribed by the order.

12

COMMITTEE NOTE

4

The rule is amended to provide that Rule 7005.1 applies incontested matters. That rule governs the intervention of a State orthe United States in a pending action when the constitutionality ofa state or federal statute is questioned. Intervention of a State orthe United States formerly was governed by F. R. Civ. P. 24(c) andis now governed by F. R. Civ. P. 5.1. The remaining provisions ofRule 24(c) addressing the procedure for intervention remaininapplicable in contested matters.

5

UNITED STATES BANKRUPTCY COURT 0V . jo6CENTRAL DISTRICT OF CALIFORNIA

21041 BURBANK BOULEVARD

WOODLAND HILLS. CALIFORNIA 91367

GERALDINE MUND (SI8 8587-2840I lolt, I'FAX NO (B18) 587-2951

October 14, 2003

Peter G. McCabe, SecretaryCommittee on Rules of Practice and Procedureof the Judicial Conference of the United StatesThurgood Marshall Federal Judiciary BuildingWashington, D.C. 20544

Re: Comments on Proposed Amendments tothe Federal Rules of Practice and Procedure

Dear Mr. McCabe:

I have the following comments on the proposed amendments to Federal rules:

Federal Rule of Civil Procedure 5. I might read better if it starts with "A party who files apleading," rather than "A party that files a pleading." But the real issue here is that it seems thatthis rule should be incorporated in the Bankruptcy Rules, as we receive constitutional challengesto both state and federal statutes and there is no requirement here that notice be given in abankruptcy case.

By way of example, California passed Code of Civil Procedure § 715.050 which effectivelyterminates the automatic stay on an eviction action if judgment is obtained pre-petition. This hasbeen challenged a variety of times when a landlord seeks to evict without relief from theautomatic stay. Sometimes the Sheriff's Department is named, but that is a county agency, thestate is almost never aware of the action. If I can provide any further information, please let meknow.

Very truly yours,

GERALDINE MUNDUnited States Bankruptcy Judge

MEMORANDUM

DATE: March 9, 2004


SUBJECT: Suggested Amendment to Form 10, Proof of Claim

TO: Advisory Committee on Bankruptcy Rules

An attorney in the Bankruptcy Judges Division of the Administrative Office, newly hiredfrom private practice, has suggested amending page 2 of the Form 10, Proof of Claim, to helpelminate confusion over what is meant by the words "replaces" and "amends" in connection witha previously filed claim. This part of the form historically has generated questions about whatthe difference is between between a claim that replaces and one than amends a previously filedclaim. A copy of the proof of claim form currently in effect and two memos from the attorney

explaining the suggested amendment are attached.

The claims subcommittee of the CM/ECF Working Group also is suggesting amendmentsto the proof of claim form, aimed primarily at facilitating electronic filing and processing ofproofs of claim. One of the claims subcommittee's recommendations also would affect thereplaces/amends section of the form. If the Committee determines that amendments to the formshould be considered, combining the various suggestions would seem to be appropriate and

efficient.

Attachments

FORM B10 (Official Form 10) (12/03)

UNITED STATES BANKRUPTCY COURT DISTRICT OF PROOF OF CLAIMName of Debtor 7 Case Number

NOTE: This form should not be used to make a claim for an administrative expense arising after the commencementof the case. A "request" for payment of an administrative expense may be filed pursuant to 11 U.S.C. § 503.Name of Creditor (The person or other entity to whom the debtor owes E Check box if you are aware thatmoney or property): anyone else has filed a proof of

claim relating to your claim. Attachcopy of statement giving

Name and address where notices should be sent: particulars.E Check box if you have never

received any notices from thebankruptcy court in this case.

El Check box if the address differsfrom the address on the envelopeTelephone number: sent to you by the court. Tis SPACE IS FOR COURT USE ONLY

Account or other number by which creditor identifies debtor: Check here El replacesif this claim a previously filed claim, dated:_____________________________________________ amends

1. Basis for ClaimD Goods sold D] Retiree benefits as defined in 11 U.S.C. § 1114(a)D Services performed El Wages, salaries, and compensation (fill out below)D Money loaned Last four digits of SS #:D Personal injury/wrongful death Unpaid compensation for services performedD TaxesD Other from to

(date) (date)

5. STeu redCa.. Ufscourt judgmenty date obtained:

4. Total Amount of Claim at Timne Case Fied: $

(unsecured) (secured) (priority) (Total)If all or part of your claim is secured or entitled to priority, also complete Item 5 or 7 below.F-1 Check this box if claim includes interest or other charges in addition to the principal amount of the claim. Attach itemized statement of all

interest or additional charges.5. Secured Claim. 7. Unsecured Priority Claim.

El Check this box if your claim is secured by collateral (including a El Check this box if you have an unsecured priority claimright of setoff). Amount entitled to priority $_Brief Description of Collateral: Specify the priority of the claim:D Real Estate El Motor Vehicle El Wages, salaries, or commissions (up to $4,650),* earned within 90ri Other days before filing of the bankruptcy petition or cessation of thedebtor's business, whichever is earlier - 11 U.S.C. § 507(a)(3).Value of Collateral: $ El Contributions to an employee benefit plan - 11 U.S.C. § 507(a)(4).

E] Up to $2,100* of deposits toward purchase, lease, or rental ofAmount of arrearage and other charges at time case filed included in property or services for personal, family, or household use - II U S.C.secured claim, if any: $_ _ § 507(a)(6).

El Alimony, maintenance, or support owed to a spouse, former spouse,6. Unsecured Nonpriority Claim $. or child - 11 U.S.C. § 507(a)(7).wj Taxes or penalties owed to governmental units-Il U.S.C. § 507(a)(8).El Check this box if: a) there is no collateral or lien securing your E Other - Specify applicable paragraph of 11 U.S.C. § 507(a)(_ ).claim, or b) your claim exceeds the value of the property securing it, or *Amounts are subject to adjustment on 4/1/04 and every 3 years thereafter withif c) none or only part of your claim is entitled to priority. respect to cases commenced on or after the date of adjustment

8. Credits: The amount of all payments on this claim has been credited and deducted for the purpose of making THIS SPACE IS FOR COURT USE ONLYthis proof of claim.

9. Supporting Documents: Attach copies of supporting documents, such as promissory notes, purchaseorders, invoices, itemized statements of running accounts, contracts, court judgments, mortgages, securityagreements, and evidence of perfection of lien. DO NOT SEND ORIGINAL DOCUMENTS. If the documents arenot available, explain. If the documents are voluminous, attach a summary.

10. Date-Stamped Copy: To receive an acknowledgment of the filing of your claim, enclose a stamped, self-addressed envelope and copy of this proof of claim

Date Sign and print the name and title, if any, of the creditor or other person authorized to file

this claim (attach copy of power of attorney, if any):Penalty for presenting fraudulent claim. Fine of up to $500,000 or imprisonment for up to 5 years, or both. 18 U.S.C. §§ 152 and 3571.

FORM BI0 (Official Form 10) (12/03)

INSTRUCTIONS FOR PROOF OF CLAIM FoRMThe instructions and definitions below are general explanations of the law. In particular types of cases or circumstances, such as bankruptcy cases thatare not filed voluntarily by a debtor, there may be exceptions to these general rules.

DEFINITIONS

Debtor Secured Claim Unsecured ClaimThe person, corporation, or other entity A claim is a secured claim to the extent If a claim is not a secured claim it is anthat has filed a bankruptcy case is that the creditor has a lien on property unsecured claim. A claim may be partlycalled the debtor, of the debtor (collateral) that gives the secured and partly unsecured if the property

creditor the right to be paid from that on which a creditor has a lien is not worthCreditor property before creditors who do not enough to pay the creditor in full.A creditor is any person, corporation, have liens on the property. Unsecured Priority Claimor other entity to whom the debtor Examples of liens are a mortgage on real Certain types of unsecured claims are givenowed a debt on the date that the estate and a security interest in a car, priority, so they are to be paid in bankruptcybankruptcy case was filed. truck, boat, television set, or other item cases before most other unsecured claims (ifProof of Claim of property. A lien may have been there is sufficient money or propertyA form telling the bankruptcy court obtained through a court proceeding available to pay these claims). The mosthow much the debtor owed a creditor at before the bankruptcy case began; in common types of priority claims are listedthe time the bankruptcy case was filed some states a court judgment is a lien. on the proof of claim form. Unsecured claims(the amount of the creditor's claim). In addition, to the extent a creditor also that are not specifically given priority statusThis form must be filed with the clerk of owes money to the debtor (has a right by the bankruptcy laws are classified asthe bankruptcy court where the of setoft), the creditor's claim may be a Unsecured Nonpriority Claims.bankruptcy case was filed, secured claim. (See also Unsecured

Claim.)

Items to be completed in Proof of Claim form (if not already filled in)

Court, Name of Debtor, and Case Number: 5. Secured Claim:Fill in the name of the federal judicial district where the bankruptcy Check the appropriate place if the claim is a secured claim. You mustcase was filed (for example, Central District of California), the state the type and value of property that is collateral for the claim,name of the debtor in the bankruptcy case, and the bankruptcy case attach copies of the documentation of your lien, and state the amountnumber. If you received a notice of the case from the court, all of past due on the claim as of the date the bankruptcy case was filed. Athis information is near the top of the notice, claim may be partly secured and partly unsecured. (SeeInformation about Creditor: DEFINITIONS, above).

Complete the section giving the name, address, and telephone 6. Unsecured Nonpriority Claim:number of the creditor to whom the debtor owes money or Check the appropriate place if you have an unsecured nonpriorityproperty, and the debtor's account number, if any. If anyone else claim, sometimes referred to as a "general unsecured claim". (Seehas already filed a proof of claim relating to this debt, if you never DEFINITIONS, above.) If your claim is partly secured and partlyreceived notices from the bankruptcy court about this case, if your unsecured, state here the amount that is unsecured. If part of youraddress differs from that to which the court sent notice, or if this claim is entitled to priority, state here the amount not entitled toproof of claim replaces or changes a proof of claim that was already priority.filed, check the appropriate box on the form. 7. Unsecured Priority Claim:

1. Basis for Claim: Check the appropriate place if you have an unsecured priority claim,Check the type of debt for which the proof of claim is being filed, and state the amount entitled to priority. (See DEFINITIONS,If the type of debt is not listed, check "Other" and briefly describe above). A claim may be partly priority and partly nonpriority if, forthe type of debt. If you were an employee of the debtor, fill in the example, the claim is for more than the amount given priority by thelast four digits of your social security number and the dates of law. Check the appropriate place to specify the type of prioritywork for which you were not paid. claim.

2. Date Debt Incurred: 8. Credits:Fill in the date when the debt first was owed by the debtor. By signing this proof of claim, you are stating under oath that in

3. Court Judgments: calculating the amount of your claim you have given the debtor creditIf you have a court judgment for this debt, state the date the court for all payments received from the debtor.entered the judgment. 9. Supporting Documents:

4. Total Amount of Claim at Time Case Filed: You must attach to this proof of claim form copies of documents thatFill in the applicable amounts, including the total amount of the show the debtor owes the debt claimed or, if the documents are tooentire claim. If interest or other charges in addition to the principal lengthy, a summary of those documents. If documents are notamount of the claim are included, check the appropriate place on available, you must attach an explanation of why they are notthe form and attach an itemization of the interest and charges. available.

ADMINISTRATIVE OFFICE OF THE UNITED STATES COURTSMemorandum

DATE: February 18, 2004

FROM: Daniel A. Hawtof-

SUBJECT: Suggested Revision to Proof of Claim Form (Official Bankruptcy Form 10)

TO: Patricia S. Ketchum and James Wannamaker

In private practice, my colleagues and I often struggled with trying to understand thedifference between the "replaces" and "amends" boxes just above the "Basis for Claim" sectionof the Proof of Claim Form (Form 10). Our initial thoughts were that when a claim is amended,it necessarily replaced the prior claim. Based on these initial thoughts, we could not determinethe appropriate box to check when we filed a second proof of claim that made changes to apreviously-filed claim. As you may be aware, there are no detailed instructions regarding theseboxes.

After spending a significant amount of time researching the issue, we were unable tolocate any guidance. Based purely on instinct, we concluded that the "amends" box should bechecked when a creditor makes a change to a proof of claim it previously filed. We alsoconcluded that the "replaces" box should be checked when a claim has been assigned to a newentity. Perhaps the "replaces" box should also be checked when a creditor files a proof of claimafter one has been filed on its behalf by the debtor or trustee pursuant to Bankruptcy Rule 3004.

To this day, I am still not certain if our conclusions were correct. Perhaps the instructionson the back of Form 10 could be amended to clarify the difference between the two boxes.Please let me know if you would like to discuss this issue in more detail.

ADMINISTRATIVE OFFICE OF THE UNITED STATES COURTSMemorandum

DATE: February 19, 2004

FROM: Daniel A. Hav•--•6'

SUBJECT: Suggested Revision to Proof of Claim Form (Official Form 10)

TO: Patricia S. Ketchum and James Wannamaker

Pursuant to your request, here are my suggestions for amending Official Form 10.

I would add the instructions set forth below on the back of the form.

Check the "amends" box if you are filing a claim that makes a change or changesto a claim you previously filed.

Check the "replaces" box if: (a) you are the assignee of a claim that has alreadybeen filed; or (b) you are filing a claim after the debtor or trustee filed a claim onyour behalf pursuant to Bankruptcy Rule 3004.

Please let me know if you would like to discuss this issue in more detail.

4

C~)

MEMORANDUM

DATE: March 8, 2004


SUBJECT: Privacy-Related Amendments to Official Forms 10, 16D, and 17


Since December 1. 2003, when the privacy-related amendments to the rules and official

forms went into effect, it has come to my attention that there are three official forms that require

conforming amendments. They are Form 10, Proof of Claim, Form 16D, Caption for Use in

Adversary Proceeding Other Than for a Complaint Filed by a Debtor, and Form 17, Notice of

Appeal. As all proposed amendments are conforming ones, the proposals could be forwarded to

the Standing Committee and the Judicial Conference without publication for comment.

Form 10, Proof of Claim. The Committee amended the Proof of Claim form in 2003, as

part of the privacy-related amendments, so that a wage claimant discloses only the last four digits

of the claimant's social security number. Since December 1, 2003, however, court personnel

have pointed out that the form does not limit to the last four digits the "Account or other number

by which creditor identifies debtor." Many creditors identify debtors by their social security

numbers, and even with respect to account numbers, the Judicial Conference privacy policy and

the E-Government Act would restrict disclosure. The form should be amend to limit the

information provided on form the to the last four digits of any account or other number the

creditor uses to identify the debtor.

Form 16D, Caption for Use in Adversary Proceeding Other Than for a Complaint Filed

by a Debtor. This form was titled simply "Form 16C, Caption for Use in Adversary Proceeding"

until 1995 when the caption forms were amended to meet new statutory requirements enacted as

part of the Bankruptcy Reform Act of 1994. Among the statutory amendments was the addition

to the Code of § 342(c) which states that in any notice required to be given by a debtor to a

creditor the notice must include the debtor's address and taxpayer identification number.

Accordingly, as the complaint serves as a notice of the filing of an adversary proceeding seeking

relief against the defendant, the Committee determined that a new adversary caption form was

needed. The Committee renumbered the caption forms, designating 16C as the number for the

new caption to be used when the debtor files the adversary proceeding and designating 16D as

the number for the pre-existing caption form which was to be used on subsequent documents and

on all documents, including the complaint, in an adversary proceeding filed by any party other

than the debtor. If the debtor is an individual, of course, the taxpayer identification number is the

debtor's social security number, which must be furnished to any defendant creditor but not

displayed in the court's public records. The December 2003 amendments, accordingly,

abrogated Form 16C and directed debtors to provide their social security numbers to defendant

creditors only on the creditor's copy of the summons that is served with the complaint. With

Form 16C abrogated, it is not appropriate to continue to use the phrase "other than for a

complaint filed by a debtor" in the title of Form 16D. Form 16D is now the only caption to be

used in an adversary proceeding. In addition, the cross-reference in the note concerning the

appropriate caption to use on a Notice of Appeal should be changed from the abrogated Form

16C to Form 16A.

Form 17, Notice of Appeal. The only amendment needed is to delete the reference to

Form 16C from the directions concerning the proper caption to use. [Note: The attached copy of

the form was taken from the website. The forms displayed there are the versions prepared for the

Bankruptcy Forms Manual. As a convenience to lay users of the manual, typical captions were

included. In the case of the Notice of Appeal, inclusion of a Form 16B, Short Title, may confuse

some users and will be deleted when the amendments take effect.]

Copies of the forms with proposed amendments hand marked for clarity and proposed

committee notes are attached. A copy of Form 16A is included for reference.

Attachments

FORM B10 (Official Form 10) (12/0/)

UNITED STATES BANKRUPTCY COURT DISTRICT OF PROOF OF CLAIMName of Debtor Case Number

NOTE, This form should not be used to make a claim for an administrative expense arising after the commencementof the case. A "request" for payment of an administrative expense may be filed pursuant to 11 U.S C § 503

Name of Creditor (The person or other entity to whom the debtor owes 0 Check box if you are aware thatmoney or property): anyone else has filed a proof of

claim relating to your claim. Attachcopy of statement givingparticulars.

Name and address where notices should be sent: Check box if you have never• [ •- k t4 h lbreceived any notices from the

Lo bankruptcy court in this case.D Check box if the address differs

from the address on the envelope,fepho.nenumber: sent to you by the court. THIS SPACE IS FOR COURT USE ONLY

V/ccount or other number by which creditor identifies debtor: Check here Dreplacesif this claim a previously filed claim, dated:

D] amends

1. Basis for Claim

ED Goods sold El Retiree benefits as defined tn II U.S.C. § 1114(a)ED Services performed [] Wages, salaries, and compensation (fill out below)D Money loaned Last four digits of SS #: __

D Personal injury/wrongful death Unpaid compensation for services performedL] Taxes from toED Other (date) (date)

2. Date debt was incurred: 3. If court Judgment, date obtained:

4. Total Amount of Claim at Time Case Filed: $

(unsecured) (secured) (priority) (Total)

If all or part of your claim is secured or entitled to priority, also complete Item 5 or 7 below.0 Check this box if claim includes interest or other charges in addition to the principal amount of the claim. Attach itemized statement of all

interest or additional charges.

5. Secured Claim. 7. Unsecured Priority Claim.EZ Check this box if your claim is secured by collateral (including a El Check this box if you have an unsecured prionty claim

right of setoff) Amount entitled to prionty $

Brief Description of Collateral: Specify the priority of the claim:

El Real Estate 11 Motor Vehicle El Wages, salanes, or commissions (up to $4,650),* earned within 90r- Other - days before filing of the bankruptcy petition or cessation of the

debtor's business, whichever is earlier - 11 U.S.C. § 507(a)(3).Value of Collateral: $ E] Contributions to an employee benefit plan - II U.S.C. § 507(a)(4).

E] Up to $2, 100* of deposits toward purchase, lease, or rental ofAmount of arrearage and other charges at time case filed included in property or services for personal, family, or household use - 11 U.S.C.

secured claim, if any: S_ § 507(a)(6).El Alimony, maintenance, or support owed to a spouse, former spouse,

6. Unsecured Nonpriority Claim $_ or child - I I U.S.C. § 507(a)(7).6i Taxes or penalties owed to governmental units-I l U.S.C. § 507(a)(8).

El Check this box if: a) there is no collateral or lien securing your El Other - Specify applicable paragraph of 11 U S.C. § 507(a)( ).

claim, or b) your claim exceeds the value of the property securing it, or *Amounts are subject to adjustment on 4/1/04 and every 3 years thereafter withif c) none or only part of your claim is entitled to priority, respect to cases commenced on or after the date of adjustment

8. Credits: The amount of all payments on this claim has been credited and deducted for the purpose of making THIS SPACE IS FOR COURT USE ONLY

this proof of claim

9. Supporting Documents: Attach copies of supporting documents, such as promissory notes, purchase

orders, invoices, itemized statements of running accounts, contracts, court judgments, mortgages, securityagreements, and evidence of perfection of lien. DO NOT SEND ORIGINAL DOCUMENTS. If the documents are

not available, explain If the documents are voluminous, attach a summary.

10. Date-Stamped Copy: To receive an acknowledgment of the filing of your claim, enclose a stamped, self-addressed envelope and copy of this proof of claim


this claim (attach copy of power of attorney, if any):Penalty for presenting fraudulent claim: Fine of up to $500,000 or imprisonment for up to 5 years, or both. 18 U.S.C. §§ 152 and 3571.

FORM B1O (Official Form 10) (12/03)

INSTRUCTIONS FOR PROOF OF CLAmI FoRMThe instructions and definitions below are general explanations of the law. In particular types of cases or circumstances, such as bankruptcy cases thatare not filed voluntarily by a debtor, there may be exceptions to these general rules.

- DEFINITIONS

Debtor Secured Claim Unsecured Claim

The person, corporation, or other entity A claim is a secured claim to the extent If a claim is not a secured claim it is anthat has filed a bankruptcy case is that the creditor has a lien on property unsecured claim. A claim may be partly

called the debtor. of the debtor (collateral) that gives the secured and partly unsecured if the propertycreditor the right to be paid from that on which a creditor has a lien is not worth

Creditor property before creditors who do not enough to pay the creditor in full.

A creditor is any person, corporation, have liens on the property. Unsecured Priority Claimor other entity to whom the debtor Examples of liens are a mortgage on real Certain types of unsecured claims are givenowed a debt on the date that the estate and a security interest in a car, priority, so they are to be paid in bankruptcybankruptcy case was filed. truck, boat, television set, or other item cases before most other unsecured claims (if

Proof of Claim of property. A lien may have been there is sufficient money or property

A form telling the bankruptcy court obtained through a court proceeding available to pay these claims). The most

how much the debtor owed a creditor at before the bankruptcy case began; in common types of priority claims are listed

the time the bankruptcy case was filed some states a court judgment is a lien. on the proof of claim form. Unsecured claims

(the amount of the creditor's claim). In addition, to the extent a creditor also that are not specifically given priority status

This form must be filed with the clerk of owes money to the debtor (has a right by the bankruptcy laws are classified as

the bankruptcy court where the of setoff, the creditor's claim may be a Unsecured Nonpriority Claims.thebankruptcy cot w he fied. secured claim. (See also Unsecuredbankruptcy case was filed.Clm.

Claim.)


Court, Name of Debtor, and Case Number: 5. Secured Claim:Fill in the name of the federal judicial district where the bankruptcy Check the appropriate place if the claim is a secured claim. You mustcase was filed (for example, Central District of California), the state the type and value of property that is collateral for the claim,name of the debtor in the bankruptcy case, and the bankruptcy case attach copies of the documentation of your lien, and state the amountnumber. If you received a notice of the case from the court, all of past due on the claim as of the date the bankruptcy case was filed. Athis information is near the top of the notice. claim may be partly secured and partly unsecured. (See

Information about Creditor: DEFINITIONS, above).

Complete the section giving the name, address, and telephone 6. Unsecured Nonpriority Claim:number of the creditor to whom the debtor owes money or Check the appropriate place if you have an unsecured nonpriorityproperty, and the debtor's account number, if any. If anyone else claim, sometimes referred to as a "general unsecured claim". (Seehas already filed a proof of claim relating to this debt, if you never DEFINITIONS, above.) If your claim is partly secured and partlyreceived notices from the bankruptcy court about this case, if your unsecured, state here the amount that is unsecured. If part of youraddress differs from that to which the court sent notice, or if this claim is entitled to priority, state here the amount not entitled toproof of claim replaces or changes a proof of claim that was already priority.filed, check the appropriate box on the form. 7. Unsecured Priority Claim:

1. Basis for Claim: Check the appropriate place if you have an unsecured priority claim,Check the type of debt for which the proof of claim is being filed. and state the amount entitled to priority. (See DEFINITIONS,If the type of debt is not listed, check "Other" and briefly describe above). A claim may be partly priority and partly nonpriority if, forthe type of debt. If you were an employee of the debtor, fill in the example, the claim is for more than the amount given priority by thelast four digits of your social security number and the dates of law. Check the appropriate place to specify the type of prioritywork for which you were not paid. claim.


3. Court Judgments: calculating the amount of your claim you have given the debtor credit

If you have a court judgment for this debt, state the date the court for all payments received from the debtor.

entered the judgment. 9. Supporting Documents:4. Total Amount of Claim at Time Case Filed: You must attach to this proof of claim form copies of documents that

Tota Amuntof lai at imeCas Fied:show the debtor owes the debt claimed or, if the documents are tooFill in the applicable amounts, including the total amount of the lengthy aesmmr of the documen if documents are not

entire claim. If interest or other charges in addition to the principal lengthy, a summary of those documents. If documents are not

amount of the claim are included, check the appropriate place on available, you must attach an explanation of why they are not

the form and attach an itemization of the interest and charges.

Form 10

2004 COMMITTEE NOTE

The form is amended to specify that the creditor should provide only the last four digits ofthe account number by which the creditor identifies the debtor. Many creditors use a debtor'ssocial security number as the debtor's account number. Reporting only the last four digitsaffords greater privacy to the debtor and matches the information shown in the public records ofthe court.

Official Form 16D

Z2-- 04-)

Form 16D. CAPTION FOR USE IN ADVERSARY PROCEEDING

United States Bankruptcy CourtDistrict Of

In re )Debtor ) Case No.

)__Chapter

Plaintiff

v. )

)__Adv. Proc. No.

Defendant

COMPLAINT [or other Designation]

[If used in a Notice of Appeal (see Form 17) or other notice filed and served by a debtor, this caption must bealtered to include the debtor's address and Employer's Tax Identification Number(s) or Social Security Number(s) asin Form 164]

A

Form 16D

2004 COMMITTEE NOTE

The form is amended to reflect the 2003 abrogation of Form 16C. As a complaintinitiating an adversary proceeding serves as a notice to the defendant of the filing of an action, adebtor filing an adversary proceeding must follow the notice requirements of § 342(c) of theCode. To protect individual privacy a debtor should use the defendant's copy of the summons tobe served with the complaint to provide the information required by § 342(c) to any creditornamed as a defendant.

Official Form 16A(12/03)

Form 16A. CAPTION (FULL)

United States Bankruptcy CourtDistrict Of

In re )Set forth here all names including married, )maiden, and trade names used by debtor within )

last 6 years.] )Debtor ) Case No.

))

Address ))) Chapter)

Employer's Tax Identification (EIN) No(s). [if any]: ))

Last four digits of Social Security No(s).: )

[Designation of Character of Paper]

Official Form 17-(1v2iL)

United States Bankruptcy Court

District Of

In reDebtor

Case No.

Chapteerr

[Caption as in Form 16A, 6B , or 16D, as appropriate]

NOTICE OF APPEAL

., the plaintiff [or defendant or other party] appeals under 28 U.S.C.§ 158(a) or (b) from the judgment, order, or decree of the bankruptcy judge (describe) entered in this adversaryproceeding [or other proceeding, describe type] on the - day of I--

(month) (year)The names of all parties to the judgment, order, or decree appealed from and the names, addresses, and

telephone numbers of their respective attorneys are as follows:

Dated:

Signed:Attorney for Appellant (or Appellant, if not represented byan Attorney)

Attorney Name:

Address:

Telephone No:

If a Bankruptcy Appellate Panel Service is authorized to hear this appeal, each party has a right to have theappeal heard by the district court. The appellant may exercise this right only by filing a separate statement ofelection at the time of the filing of this notice of appeal. Any other party may elect, within the time provided in 28U.S.C. § 158(c), to have the appeal heard by the district court.

If a child support creditor or its representative is the appellant, and if the child support creditor or its representativefiles the form specified in § 304(g) of the Bankruptcy Reform Act of 1994, no fee is required.

Form 17

2004 COMMITTEE NOTE

The form is amended to reflect the 2003 abrogation of Form 16C.

The Committee will receive an oral briefing on the status of the Bankruptcy Abuse

Prevention and Consumer Protection Act of 2004

Professor Resnick, the chair of the Style Subcommittee, will provide an oral report

concerning the restyling of Civil Rules and discuss how the committee might

proceed in light of the impact on the Bankruptcy Rules

MEMORANDUM



RE: E-GOVERNMENT ACT OF 2002

DATE: MARCH 4,2004

Congress enacted the E-Government Act of 2002 on December 17, 2002. Public Law

107-347, 116 Stat. 2913. The Act generally requires Federal agencies to promote the use of

electronic government services, and § 205 of the Act governs the Federal courts. Subsection (a)

of that section directs the courts to establish and maintain a website with a variety of information.

Subsection (c)(1) provides that the courts must make all electronically filed documents publicly

available online, although § 205 (c)(2) provides that documents filed under seal would not be

made available. Section 205 (c)(3) of the Act directs the Supreme Court to promulgate rules to

protect privacy and address security issues created by the electronic filing environment.

Moreover, that statute provides that the rules, to the extent practicable, be uniform throughout the

Federal courts.

Judge David Levi, Chair of the Standing Committee on Rules of Practice and Procedure,

established a committee to consider and address the issues presented by the E-Government Act

of 2002. The Committee, chaired by Judge Sidney Fitzwater, met in Phoenix in January. Judge

Small and I attended the meeting on behalf of the Advisory Committee. The Committee

considered several proposed solutions and concluded that the matter should be handled primarily

at the Advisory Committee level. Professor Dan Capra, the Reporter for the Evidence

Committee, is also serving as the Reporter for the E-Government Committee. Prof. Capra

1

drafted a template of a rule for use by the Committees with the expectation that they would

address the issue at their Spring meetings. The Advisory Committees, through their Reporters,

will work together to arrive at acceptable drafts which will be presented to the E-Government

Committee for an email vote to be taken this summer. The Standing Committee will then

consider the matter at its Fall meeting.

The template is set out below. It essentially provides that documents filed in the Federal

courts should include only the last four digits of a social security number, that minor children

should be identified by their initials only, that dates of birth should state only the year of birth,

only the last four digits of financial accounts should be disclosed, and a home address should

state only the city and state of the address. The template is provided for your information only,

as Judge Small and I believe that it is more appropriate for the Bankruptcy Rules simply to

incorporate the applicable Civil Rule into Part VII of the Bankruptcy Rules. That is, the Civil

Rules Committee is currently considering the same template for adoption into the Civil Rules. In

keeping with the stated goal of uniformity, the Bankruptcy Rules can simply adopt the Civil Rule

by an appropriate cross reference to that rule. Proposed Bankruptcy Rule 70 would

accomplish that cross reference as would the proposed amendment to Rule 9014.

PRIVACY RULE TEMPLATE

Rule [ ] Filing and Privacy

(a) Personal Data Identifiers In Court Filings. Subject to (b) of this rule, a party filing

any information or material with the court- whether electronically or in paper - must comply with

the following procedures:

2

(1) Social Security Numbers. Ifa person's social security number must be included,

the first five numbers must be deleted.

(2) Names of Minor Children. If the name of a minor child must be included, only

the child's initials may be disclosed.

(3) Dates of Birth. If a person's date of birth must be included, only the year of birth

may be disclosed.

(4) Financial-Account Numbers. If a financial-account number must be included,

only the last four digits may be disclosed.

(5) Home Address. If a home address must be included, only the city and state may

be disclosed.

(b) Unredacted Filing Under Seal. A party wishing to file an otherwise proper document

containing the personal identifiers listed in (a) may file an unredacted document under seal. That

document must be retained by the court as part of the record. The court may require the party to file

a redacted copy for the public file.

(c) Judicial Conference Standards. A party must comply with all policies and interim rules

adopted by the Judicial Conference to protect privacy and security concerns related to the public

3

availability of court filings.

Template Committee Note

The rule is adopted in compliance with section 205(c)(3) of the E-Government Act of 2002,Public Law 107-347. Section 205(c)(3) requires the Supreme Court to prescribe rules "to protectprivacy and security concerns relating to electronic filing of documents and the public availability• . . of documents filed electronically." The rule goes further than the E-Government Act inprotecting personal identifiers, as it applies to paper as well as electronic filings. Paper filings inmost districts are scanned by the clerk and made part of the electronic case file. As such they are asavailable to the public over the internet as are electronic filings, and therefore raise the same privacyand security concerns when filed with the court.

The rule is derived from and implements the policy adopted by the Judicial Conference inSeptember 2001 to address the privacy concerns resulting from public access to electronic case files.See http://www.privacy.uscourts.gov/Policy.htm The Judicial Conference policy sets forth sevengeneral principles:

1. There should be consistent, nationwide policies in federal courts in order to ensure thatsimilar privacy protections and access presumptions apply regardless of which federal courtis the custodian of a particular case file.

2. Notice of these nationwide policies should be given to all litigants in federal court so thatthey will be aware of the fact that materials which they submit in a federal court proceedingcould become available on the Internet.

3. Members of the bar must be educated about the policies and the fact that they must protecttheir clients by carefully examining the documents that they file in federal court for sensitive,private information and by making the appropriate motions to protect documents fromelectronic access when necessary.

4. Except where otherwise noted, the policies apply to both paper and electronic files.

5. Electronic access to docket sheets through PACERNet and court opinions through courtwebsites will not be affected by these policies.

4

6. The availability of case files at the courthouse will not be affected or limited by thesepolicies.

7. Nothing in these recommendations is intended to create a private right of action or to limitthe application of Rule 11 of the Federal Rules of Civil Procedure.

The Judicial Conference policy further provides that documents in [civil] case files shouldbe made available electronically to the same extent they are available at the courthouse, provided thatcertain "personal data identifiers" are not included in the public file. Because case files are availableover the internet through PACERNet, they are no longer protected by the "practical obscurity" thatexisted when the files were available only at the courthouse. Both the Judicial Conference policy andthis rule take account of this technological development by preventing the widespread disseminationof personal data identifiers that otherwise would be included in court filings.

Parties should not include sensitive information in any document filed with the court unlessit is necessary and relevant to the case. Parties must remember that any personal information nototherwise protected will be made available over the internet through PACERNet. Counsel shouldnotify clients of this fact so that an informed decision may be made on what information is to beincluded in a document filed with the court.

Subdivision (b) allows parties to file an unredacted document under seal. This provision isderived from section 205(c)(3)(iv) of the E-Government Act.

The clerk is not required to review documents filed with'the court for compliance with thisrule.

The template may not be adopted in this specific form by the other Advisory Committees or

the Standing Committee. There has already been discussion about deleting subdivision (c) of the

template and significantly shortening the Committee Note. In any event, the template gives you an

idea of what the Standing Committee is likely to eventually consider. At the least, the Bankruptcy

Rule version may differ from the template in that the debtor's home address is essential in many

contested cases. Mortgagees initiate contested matters seeking relief from the automatic stay to

commence or continue a foreclosure action on the debtor's residence. The request for relief and the

order granting that relief will surely include the full address. The same can be said for objections

5

to a debtor's claimed homestead exemption. Thus, it would seem appropriate to include that

information in the motion to initiate the action for relief from the stay or to object to the exemption.

I have raised the issue of a full address in foreclosure actions with Professor Cooper, the Reporter

for the Civil Rules Committee, and I expect that they will address the matter at their meeting later

in the Spring.

As stated above, we do not believe that the Bankruptcy Rules require a complete version of

the privacy rule. Rather, we suggest that Part VII of the Rules be amended to add a cross reference

to the appropriate Civil Rule, and that Rule 9014 be amended to add that the new Part VII rule apply

in contested matters. The proposals must account for the needs of the bankruptcy system to have

a debtor's full address set out in a motion for relief from the stay or in an objection to a claim of a

homestead exemption. Until the civil rules version is published, however, we can only assume that

it will follow the template and proceed with that assumption in mind. Thus, the proposals for

amendments to the Bankruptcy Rules are set out below.

RULE 70-. FILING AND PRIVACY

Rule __ F.R.Civ.P. applies in adversary proceedings.

COMMITTEE NOTE

The E-Government Act of 2002, Public Law 107-347, requiredthe Supreme Court to promulgate rules to protect privacy and addresssecurity concerns when documents are filed electronically in theFederal courts. This rule makes Civil Rule __ that was adopted toimplement the E-Government Act applicable in adversaryproceedings.

6

RULE 9014. CONTESTED MATTERS

1

2 (c) APPLICATION OF PART VII RULES. Unless the court

3 directs otherwise, the following rules shall apply: 70XX (a)(1)-(4).

4 (b). and (c), 7009, 7017, 7021, 7025, 7026, 7028-7037, 7041, 7042,

5 7052, 7054-7056, 7064, 7069, and 7071. An entity that desires to

6 perpetuate testimony may proceed in the same manner as provided in

7 Rule 7027 for the taking of a deposition before an adversary

8 proceeding. The court may at any stage in a particular matter direct

9 that one or more of the other rules in Part VII shall apply. The court

10 shall give the parties notice of any order issued under this paragraph

11 to afford them a reasonable opportunity to comply with the

12 procedures prescribed by the order.

COMMITTEE NOTE

The amendment makes Rule 70 applicable in contested matters.Rule 70 provides that Rule __ F.R.Civ.P. applies in adversaryproceedings with the exception of subdivision (a)(5) of that rule. TheCivil Rule restricts the submission of specific kinds of information inorder to protect the privacy and security of parties to the litigation.Subdivision (a)(5) restricts the publication of a party's residence to alisting of the city and state in which the residence is located. Incontested matters seeking relief from the stay or objecting to adebtor's homestead exemption, the full address is an essential part ofthe movant's proof and should be included in the pleading. Thus,subdivision (a)(5) of the rule is not applicable in contested matters.If the debtor's address is not an essential fact in other contestedmatters, the full address should not be disclosed, and the court can, on

7

request of a party in interest, enter an appropriate order to restrict theuse of the full address in the matter.

8

--H.R.2458--

(Became Public Law No: 107-347 on 12/17/2002)

One Hundred Seventh Congress

of the

United States ofAmerica

AT THE SECOND SESSION

Begun and held at the City of Washington on Wednesday,

the twenty-third day of January, two thousand and two

An Act

To enhance the management and promotion of electronic Government services and processes byestablishing a Federal Chief Information Officer within the Office of Management and Budget,and by establishing a broad framework of measures that require using Internet-based informationtechnology to enhance citizen access to Government information and services, and for otherpurposes.

Be it enacted by the Senate and House of Representatives of the United States of America inCongress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE- This Act may be cited as the 'E-Government Act of 2002'.

(b) TABLE OF CONTENTS- The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings and purposes.

TITLE I--OFFICE OF MANAGEMENT AND BUDGET ELECTRONICGOVERNMENT SERVICES

Sec. 101. Management and promotion of electronic government services.

Sec. 102. Conforming amendments.

TITLE II--FEDERAL MANAGEMENT AND PROMOTION OFELECTRONIC GOVERNMENT SERVICES

Sec. 201. Definitions.

Sec. 202. Federal agency responsibilities.

Sec. 203. Compatibility of executive agency methods for use and acceptance ofelectronic signatures.

Sec. 204. Federal Internet portal.

Sec. 205. Federal courts.

Sec. 206. Regulatory agencies.

Sec. 207. Accessibility, usability, and preservation of government information.

Sec. 208. Privacy provisions.

Sec. 209. Federal information technology workforce development.

Sec. 210. Share-in-savings initiatives.

Sec. 211. Authorization for acquisition of information technology by State and localgovernments through Federal supply schedules.

Sec. 212. Integrated reporting study and pilot projects.

Sec. 213. Community technology centers.

Sec. 214. Enhancing crisis management through advanced information technology.

Sec. 215. Disparities in access to the Internet.

Sec. 216. Common protocols for geographic information systems.

TITLE III--INFORMATION SECURITY

Sec. 301. Information security.

Sec. 302. Management of information technology.

Sec. 303. National Institute of Standards and Technology.

Sec. 304. Information Security and Privacy Advisory Board.

Sec. 305. Technical and conforming amendments.

TITLE IV--AUTHORIZATION OF APPROPRIATIONS AND EFFECTIVEDATES

Sec. 401. Authorization of appropriations.

Sec. 402. Effective dates.

TITLE V--CONFIDENTIAL INFORMATION PROTECTION AND

STATISTICAL EFFICIENCY

Sec. 501. Short title.

Sec. 502. Definitions.

Sec. 503. Coordination and oversight of policies.

Sec. 504. Effect on other laws.

Subtitle A--Confidential Information Protection


Sec. 512. Limitations on use and disclosure of data and information.

Sec. 513. Fines and penalties.

Subtitle B--Statistical Efficiency


Sec. 522. Designation of statistical agencies.

Sec. 523. Responsibilities of designated statistical agencies.

Sec. 524. Sharing of business data among designated statistical agencies.

Sec. 525. Limitations on use of business data provided by designated statisticalagencies.

Sec. 526. Conforming amendments.

SEC. 2. FINDINGS AND PURPOSES.

(a) FINDINGS- Congress finds the following:

(1) The use of computers and the Internet is rapidly transforming societal interactionsand the relationships among citizens, private businesses, and the Government.

(2) The Federal Government has had uneven success in applying advances ininformation technology to enhance governmental functions and services, achievemore efficient performance, increase access to Government information, and increasecitizen participation in Government.

(3) Most Internet-based services of the Federal Government are developed andpresented separately, according to the jurisdictional boundaries of an individualdepartment or agency, rather than being integrated cooperatively according tofunction or topic.

(4) Internet-based Government services involving interagency cooperation areespecially difficult to develop and promote, in part because of a lack of sufficientfunding mechanisms to support such interagency cooperation.

(5) Electronic Government has its impact through improved Government performanceand outcomes within and across agencies.

(6) Electronic Government is a critical element in the management of Government, tobe implemented as part of a management framework that also addresses finance,procurement, human capital, and other challenges to improve the performance ofGovernment.

(7) To take full advantage of the improved Government performance that can beachieved through the use of Internet-based technology requires strong leadership,better organization, improved interagency collaboration, and more focused oversightof agency compliance with statutes related to information resource management.

(b) PURPOSES- The purposes of this Act are the following:

(1) To provide effective leadership of Federal Government efforts to develop andpromote electronic Government services and processes by establishing anAdministrator of a new Office of Electronic Government within the Office ofManagement and Budget.

(2) To promote use of the Internet and other information technologies to provideincreased opportunities for citizen participation in Government.

(3) To promote interagency collaboration in providing electronic Governmentservices, where this collaboration would improve the service to citizens by integratingrelated functions, and in the use of internal electronic Government processes, wherethis collaboration would improve the efficiency and effectiveness of the processes.

(4) To improve the ability of the Government to achieve agency missions andprogram performance goals.

(5) To promote the use of the Internet and emerging technologies within and acrossGovernment agencies to provide citizen-centric Government information andservices.

(6) To reduce costs and burdens for businesses and other Government entities.

(7) To promote better informed decision making by policy makers.

(8) To promote access to high quality Government information and services acrossmultiple channels.

(9) To make the Federal Government more transparent and accountable.

(10) To transform agency operations by utilizing, where appropriate, best practices

from public and private sector organizations.

(11) To provide enhanced access to Government information and services in a mannerconsistent with laws regarding protection of personal privacy, national security,records retention, access for persons with disabilities, and other relevant laws.

TITLE I--OFFICE OF MANAGEMENT AND BUDGET ELECTRONICGOVERNMENT SERVICES

TITLE II--FEDERAL MANAGEMENT AND PROMOTION OF ELECTRONICGOVERNMENT SERVICES

SEC. 201. DEFINITIONS.

Except as otherwise provided, in this title the definitions under sections 3502 and 3601 oftitle 44, United States Code, shall apply.

SEC. 202. FEDERAL AGENCY RESPONSIBILITIES.

(a) IN GENERAL- The head of each agency shall be responsible for--

(1) complying with the requirements of this Act (including the amendments made bythis Act), the related information resource management policies and guidanceestablished by the Director of the Office of Management and Budget, and the relatedinformation technology standards promulgated by the Secretary of Commerce;

(2) ensuring that the information resource management policies and guidanceestablished under this Act by the Director, and the related information technologystandards promulgated by the Secretary of Commerce are communicated promptlyand effectively to all relevant officials within their agency; and

(3) supporting the efforts of the Director and the Administrator of the GeneralServices Administration to develop, maintain, and promote an integrated Internet-based system of delivering Federal Government information and services to the publicunder section 204.

(b) PERFORMANCE INTEGRATION-

(1) Agencies shall develop performance measures that demonstrate how electronicgovernment enables progress toward agency objectives, strategic goals, and statutorymandates.

(2) In measuring performance under this section, agencies shall rely on existing datacollections to the extent practicable.

(3) Areas of performance measurement that agencies should consider include--

(A) customer service;

(B) agency productivity; and

(C) adoption of innovative information technology, including the appropriateuse of commercial best practices.

(4) Agencies shall link their performance goals, as appropriate, to key groups,including citizens, businesses, and other governments, and to internal FederalGovernment operations.

(5) As appropriate, agencies shall work collectively in linking their performance goalsto groups identified under paragraph (4) and shall use information technology indelivering Government information and services to those groups.

(c) AVOIDING DIMINISHED ACCESS- When promulgating policies and implementingprograms regarding the provision of Government information and services over the Internet,agency heads shall consider the impact on persons without access to the Internet, and shall, tothe extent practicable--

(1) ensure that the availability of Government information and services has not beendiminished for individuals who lack access to the Internet; and

(2) pursue alternate modes of delivery that make Government information andservices more accessible to individuals who do not own computers or lack access tothe Internet.

(d) ACCESSIBILITY TO PEOPLE WITH DISABILITIES- All actions taken by Federaldepartments and agencies under this Act shall be in compliance with section 508 of theRehabilitation Act of 1973 (29 U.S.C. 794d).

(e) SPONSORED ACTIVITIES- Agencies shall sponsor activities that use informationtechnology to engage the public in the development and implementation of policies andprograms.

(f) CHIEF INFORMATION OFFICERS- The Chief Information Officer of each of theagencies designated under chapter 36 of title 44, United States Code (as added by this Act)shall be responsible for--

(1) participating in the functions of the Chief Information Officers Council; and

(2) monitoring the implementation, within their respective agencies, of informationtechnology standards promulgated by the Secretary of Commerce, including commonstandards for interconnectivity and interoperability, categorization of FederalGovernment electronic information, and computer system efficiency and security.

(g) E-GOVERNMENT STATUS REPORT-

(1) IN GENERAL- Each agency shall compile and submit to the Director an annualE-Government Status Report on--

(A) the status of the implementation by the agency of electronic governmentinitiatives;

(B) compliance by the agency with this Act; and

(C) how electronic Government initiatives of the agency improve performancein delivering programs to constituencies.

(2) SUBMISSION- Each agency shall submit an annual report under this subsection--

(A) to the Director at such time and in such manner as the Director requires;

(B) consistent with related reporting requirements; and

(C) which addresses any section in this title relevant to that agency.

(h) USE OF TECHNOLOGY- Nothing in this Act supersedes the responsibility of an agencyto use or manage information technology to deliver Government information and servicesthat fulfill the statutory mission and programs of the agency.

(i) NATIONAL SECURITY SYSTEMS-

(1) INAPPLICABILITY- Except as provided under paragraph (2), this title does notapply to national security systems as defined in section 11103 of title 40, UnitedStates Code.

(2) APPLICABILITY- This section, section 203, and section 214 do apply to nationalsecurity systems to the extent practicable and consistent with law.

SEC. 203. COMPATIBILITY OF EXECUTIVE AGENCY METHODS FORUSE AND ACCEPTANCE OF ELECTRONIC SIGNATURES.

(a) PURPOSE- The purpose of this section is to achieve interoperable implementation ofelectronic signatures for appropriately secure electronic transactions with Government.

(b) ELECTRONIC SIGNATURES- In order to fulfill the objectives of the GovernmentPaperwork Elimination Act (Public Law 105-277; 112 Stat. 2681-749 through 2681-751),each Executive agency (as defined under section 105 of title 5, United States Code) shallensure that its methods for use and acceptance of electronic signatures are compatible withthe relevant policies and procedures issued by the Director.

(c) AUTHORITY FOR ELECTRONIC SIGNATURES- The Administrator of GeneralServices shall support the Director by establishing a framework to allow efficientinteroperability among Executive agencies when using electronic signatures, includingprocessing of digital signatures.

(d) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated tothe General Services Administration, to ensure the development and operation of a Federalbridge certification authority for digital signature compatibility, and for other activitiesconsistent with this section, $8,000,000 or such sums as are necessary in fiscal year 2003, andsuch sums as are necessary for each fiscal year thereafter.

SEC. 204. FEDERAL INTERNET PORTAL.

(a) IN GENERAL-

(1) PUBLIC ACCESS- The Director shall work with the Administrator of the GeneralServices Administration and other agencies to maintain and promote an integratedInternet-based system of providing the public with access to Government informationand services.

(2) CRITERIA- To the extent practicable, the integrated system shall be designed andoperated according to the following criteria:

(A) The provision of Internet-based Government information and servicesdirected to key groups, including citizens, business, and other governments,and integrated according to function or topic rather than separated accordingto the boundaries of agency jurisdiction.

(B) An ongoing effort to ensure that Internet-based Government servicesrelevant to a given citizen activity are available from a single point.

(C) Access to Federal Government information and services consolidated, asappropriate, with Internet-based information and services provided by State,local, and tribal governments.

(D) Access to Federal Government information held by 1 or more agenciesshall be made available in a manner that protects privacy, consistent with law.

(b) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated tothe General Services Administration $15,000,000 for the maintenance, improvement, andpromotion of the integrated Internet-based system for fiscal year 2003, and such sums as arenecessary for fiscal years 2004 through 2007.

SEC. 205. FEDERAL COURTS.

(a) INDIVIDUAL COURT WEBSITES- The Chief Justice of the United States, the chiefjudge of each circuit and district and of the Court of Federal Claims, and the chief bankruptcyjudge of each district shall cause to be established and maintained, for the court of which thejudge is chief justice or judge, a website that contains the following information or links towebsites with the following information:

(1) Location and contact information for the courthouse, including the telephonenumbers and contact names for the clerk's office and justices' or judges' chambers.

(2) Local rules and standing or general orders of the court.

(3) Individual rules, if in existence, of each justice or judge in that court.

(4) Access to docket information for each case.

(5) Access to the substance of all written opinions issued by the court, regardless ofwhether such opinions are to be published in the official court reporter, in a textsearchable format.

(6) Access to documents filed with the courthouse in electronic form, to the extentprovided under subsection (c).

(7) Any other information (including forms in a format that can be downloaded) thatthe court determines useful to the public.

(b) MAINTENANCE OF DATA ONLINE-

(1) UPDATE OF INFORMATION- The information and rules on each website shallbe updated regularly and kept reasonably current.

(2) CLOSED CASES- Electronic files and docket information for cases closed formore than 1 year are not required to be made available online, except all writtenopinions with a date of issuance after the effective date of this section shall remainavailable online.

(c) ELECTRONIC FILINGS-

(1) IN GENERAL- Except as provided under paragraph (2) or in the rules prescribedunder paragraph (3), each court shall make any document that is filed electronicallypublicly available online. A court may convert any document that is filed in paperform to electronic form. To the extent such conversions are made, all such electronicversions of the document shall be made available online.

(2) EXCEPTIONS- Documents that are filed that are not otherwise available to thepublic, such as documents filed under seal, shall not be made available online.

(3) PRIVACY AND SECURITY CONCERNS- (A)(i) The Supreme Court shallprescribe rules, in accordance with sections 2072 and 2075 of title 28, United StatesCode, to protect privacy and security concerns relating to electronic filing ofdocuments and the public availability under this subsection of documents filedelectronically.

(ii) Such rules shall provide to the extent practicable for uniform treatment of privacyand security issues throughout the Federal courts.

(iii) Such rules shall take into consideration best practices in Federal and State courtsto protect private information or otherwise maintain necessary information security.

(iv) To the extent that such rules provide for the redaction of certain categories of

information in order to protect privacy and security concerns, such rules shall provide

that a party that wishes to file an otherwise proper document containing such

information may file an unredacted document under seal, which shall be retained by

the court as part of the record, and which, at the discretion of the court and subject to

any applicable rules issued in accordance with chapter 131 of title 28, United States

Code, shall be either in lieu of, or in addition, to, a redacted copy in the public file.

(B)(i) Subject to clause (ii), the Judicial Conference of the United States may issue

interim rules, and interpretive statements relating to the application of such rules,which conform to the requirements of this paragraph and which shall cease to have

effect upon the effective date of the rules required under subparagraph (A).

(ii) Pending issuance of the rules required under subparagraph (A), any rule or order

of any court, or of the Judicial Conference, providing for the redaction of certain

categories of information in order to protect privacy and security concerns arising

from electronic filing shall comply with, and be construed in conformity with,subparagraph (A)(iv).

(C) Not later than 1 year after the rules prescribed under subparagraph (A) take effect,and every 2 years thereafter, the Judicial Conference shall submit to Congress a report

on the adequacy of those rules to protect privacy and security.

(d) DOCKETS WITH LINKS TO DOCUMENTS- The Judicial Conference of the United

States shall explore the feasibility of technology to post online dockets with links allowing all

filings, decisions, and rulings in each case to be obtained from the docket sheet of that case.

(e) COST OF PROVIDING ELECTRONIC DOCKETING INFORMATION- Section 303(a)

of the Judiciary Appropriations Act, 1992 (28 U.S.C. 1913 note) is amended in the first

sentence by striking 'shall hereafter' and inserting 'may, only to the extent necessary,'.

(f0 TIME REQUIREMENTS- Not later than 2 years after the effective date of this title, the

websites under subsection (a) shall be established, except that access to documents filed in

electronic form shall be established not later than 4 years after that effective date.

(g) DEFERRAL-

(1) IN GENERAL-

(A) ELECTION-

(i) NOTIFICATION- The Chief Justice of the United States, a chief

judge, or chief bankruptcy judge may submit a notification to theAdministrative Office of the United States Courts to defer compliancewith any requirement of this section with respect to the SupremeCourt, a court of appeals, district, or the bankruptcy court of a district.

(ii) CONTENTS- A notification submitted under this subparagraph

shall state--

(I) the reasons for the deferral; and

(II) the online methods, if any, or any alternative methods, such

court or district is using to provide greater public access toinformation.

(B) EXCEPTION- To the extent that the Supreme Court, a court of appeals,

district, or bankruptcy court of a district maintains a website under subsection

(a), the Supreme Court or that court of appeals or district shall comply with

subsection (b)(1).

(2) REPORT- Not later than 1 year after the effective date of this title, and every year

thereafter, the Judicial Conference of the United States shall submit a report to the

Committees on Governmental Affairs and the Judiciary of the Senate and the

Committees on Government Reform and the Judiciary of the House of

Representatives that--

(A) contains all notifications submitted to the Administrative Office of the

United States Courts under this subsection; and

(B) summarizes and evaluates all notifications.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.

END

MEMORANDUM

DATE: March 4, 2004


SUBJECT: Automatic Adjustment of Certain Dollar Amounts in the Bankruptcy Code and in

Official Forms 6-E and 10 Pursuant to § 104(b) of the Code


Section 104(b), which was added to the Bankruptcy Code by the Bankruptcy Reform Act

of 1994, provides for the automatic adjustment of certain dollar amounts in the Code every three

years according to a formula specified in the provision. The date on which the dollar amounts

were first adjusted was April 1, 1995, and another adjustment is scheduled to take effect April 1,

2004. Several of the dollar amounts that are adjusted under § 104(b) appear in two of the official

bankruptcy forms, Form 6-E, the schedule of Creditors Holding Claims Entitled to Priority, and

Form 10, the Proof of Claim.

The dollar amount adjustments reflect the change in the Consumer Price Index for All

Urban Consumers published by the United States Department of Labor for the three-year period

ending December 31, 2003, and rounded to the nearest $25. Application of this formula to the

dollars amounts in the specified provisions of the Bankruptcy Code is purely ministerial.

Accordingly, the Judicial Conference in 1995 authorized the adjustments to be made and

published in the Federal Register every three years without further action by the Conference.

Amendment of the official forms to conform to the automatic adjustments made to the Code also

is ministerial, and the Conference likewise authorized the amendments to be made every three

years without further action by the Conference.

Copies of the memorandum sent to judges with a chart showing the adjustments to be

made and the two official forms as they will appear on April 1, 2004, are attached.

Attachment

LEONIDAS RALPH MECIIAM ADMINISTRATIVE OFFICE OF THEDirector

UNITED STATES COURTSCLARENCE A LEF. JR.

Associale Direuor WASHINGTON. 1) C. 20544

March 5, 2004

MEMORANDUM TO: CHIEF JUDGES, UNITED STATES COURTS OF APPEALSCHIEF JUDGES, UNITED STATES DISTRICT COURTSJUDGES, UNITED STATES BANKRUPTCY COURTSCLERKS, UNITED STATES BANKRUPTCY COURTSBANKRUPTCY ADMINISTRATORS

SUBJECT: Automatic Adjustment of Certain Dollar Amounts in the Bankruptcy Code andOfficial Bankruptcy Forms (INFORMATION)

On April 1, 2004, automatic adjustments to the dollar amounts stated in various provisionsof the Bankruptcy Code, Title I I,U.S.C., will become effective. These amended dollar amountswill apply to cases filed on or after April 1, 2004.

These amended dollar amounts will affect the eligibility of a debtor to file under Chapter 13of the Bankruptcy Code, certain maximum values of property that a debtor may claim as exempt,the maximum amount of certain claims entitled to priority, the minimum aggregate value of claimsneeded to commence an involuntary bankruptcy, and the value of "luxury goods and services"deemed to be nondischargeable. In the Bankruptcy Reform Act of 1994, Congress provided for theautomatic adjustment of these dollar amounts at three-year intervals commencing April 1, 1998.The relevant provisions are codified in of the Bankruptcy Code, l I U.S.C. § 104(b).

The adjustments reflect the change in the Consumer Price Index for All Urban Consumerspublished by the United States Department of Labor for the three-year period ending December 31.2003, and rounded to the nearest $25. Use of this formula to adjust specified dollar amounts in theBankruptcy Code was prescribed by Congress in the Bankruptcy Reform Act of 1994. 11 U.S.C.§ 104(b)(1). The Judicial Conference on February 24. 2004, published the revised dollar amountsin volume 69, number 36, of the Federal Register, at page 8482, as required under II U.S.C.§ 104(b)(2). The next three-year automatic adjustments of these dollar amounts will be publishedprior to March 1, 2007, and take effect April 1, 2007. Attached is a chart showing the affectedsections of the Bankruptcy Code and both the current and the revised dollar amounts in thosesections.

A TRADITION OF SERVICE TO THE FEDERAL .IDICIARY

Automatic Adjustment of Certain Dollar Amounts in the Bankruptcy Code 2and Official Bankruptcy Forms

Two of the Official Bankruptcy Forms contain references to several of the affected dollaramounts. Accordingly, Official Form 6E, Schedule of Creditors Holding Claims Entitled toPriority, and Official Form 10, Proof of Claim, also will be amended April 1, 2004, and willapply to cases filed on or after that date. Copies of the amended forms are also attached.

Questions concerning the revised dollar amounts in the Bankruptcy Code and OfficialBankruptcy Forms may be directed to Francis F. Szczebak, Chief. Bankruptcy Judges Division,at (202) 502-1900 or via e-mail at Frank Szczebak/DCA/AO/USCOURTS.


Attachments

Attachment

I I U.S.C. Dollar Amount to be New (Adjusted)Adjusted Dollar Amount

Section 109(e) - allowable debt limits for filing $290,525 (each time it $307,675 (each timebankruptcy under Chapter 13 appears) it appears)

$871,550 (each time it $922, 975 (eachappears) time it appears)

Section 303(b) - minimum aggregate claims neededfor the commencement of an involuntary bankruptcy

(I)- in paragraph (I) $11,625 S12. 300

(2)- in paragraph (2) $11,625 $12,300

Section 507(a) - priority claims

(I) - in paragraph (3) $4,650 S4,925

(2) - in paragraph (4XB)(i) $ 4.650 S4.925

(3) - in paragraph (5) $ 4.650 S4,925

(4) - in paragraph (6) $2,100 $2,225

Section 522(d) - value of property exemptionsallowed to the debtor

(1)- in paragraph (1) $17,425 $18,450

(2)- in paragraph (2) $ 2,775 $ 2,950

(3)- in paragraph (3) $ 450 $ 475$ 9,300 $ 9,850

(4)- in paragraph (4) $ 1,150 $ 1.225

(5)- in paragraph (5) $ 925 $ 975$ 8.725 $ 9,250

(6) - in paragraph (6) $ 1.750 $ 1,850

(7)- in paragraph (8) S 9.300 $ 9.850

(8) - in paragraph (I 1)(D) $17,425 $18.450

Section 523(a)(2)(C) - "luxury goods and services" $1,150 (each time it $1,225 (each time itor cash advances obtained by the consumer debtor appears) appears)within 60 days before the filing of a bankruptcypetition, which are considered nondischargeable

Form 86E(04/04)

In re , Case No.Debtor (if known)

SCHEDULE E - CREDITORS HOLDING UNSECURED PRIORITY CLAIMS

A complete list of claims entitled to priority, listed separately by type of priority, is to be set forth on the sheets provided. Only holders ofunsecured claims entitled to priority should be listed in this schedule. In the boxes provided on the attached sheets,s tate the name,m ailingaddress, including zip code, and last four digits of the account number, if any, of all entities holding priority claims against the debtor or theproperty of the debtor, as of the date of the filing of the petition. The complete account number of any account the debtor has with the creditor isuseful to the trustee and the creditor and may be provided if the debtor chooses to do so.

If any entity other than a spouse in a joint case may be jointly liable on a claim, place an "X" in the column labeled "Codebtor," include theentity on the appropriate schedule of creditors, and complete Schedule H-Codebtors. If a joint petition is filed, state whether husband, wife, bothof them or the marital community may be liable on each claim by placing an "H,""W,""J,' or "C" in the column labeled "Husband, Wife, Joint, orCommunity."

If the claim is contingent, place an "X" in the column labeled "Contingent." If the claim is unliquidated, place an "X" in the column labeled"Unliquidated." If the claim is disputed, place an "X" in the column labeled "Disputed." (You may need to place an "X" in more than one ofthese three columns.)

Report the total of claims listed on each sheet in the box labeled "Subtotal" on each sheet. Report the total of all claims listed on thisSchedule E in the box labeled "Total" on the last sheet of the completed schedule. Repeat this total also on the Summary of Schedules.

Li Check this box if debtor has no creditors holding unsecured priority claims to report on this Schedule E.

TYPES OF PRIORITY CLAIMS (Check the appropriate box(es) below if claims in that category are listed on the attached sheets)

E] Extensions of credit in an involuntary case

Claims arising in the ordinary course of the debtor's business or financial affairs after the commencement of the case but before the earlier ofthe appointment of a trustee or the order for relief. 11 U.S.C. § 507(a)(2).

LI Wages, salaries, and commissions

Wages,s alaries, and commissions,i ncluding vacation, severance, and sick leave pay owing to employees and commissions owing to qualifyingindependent sales representatives up to $4,925* per person earned within 90 days immediately preceding the filing of the original petition, or thecessation of business, whichever occurred first, to the extent provided in II U.S.C. § 507(a)(3).

EL Contributions to employee benefit plans

Money owed to employee benefit plans for services rendered within 180 days immediately preceding the filing of the original petition, or thecessation of business, whichever occurred first, to the extent provided in 11 U.S.C. § 507(a)(4).

El Certain farmers and fishermen

Claims of certain farmers and fishermen, up to $4,925* per farmer or fisherman, against the debtor, as provided in 11 U.S.C. § 507(a)(5).

El Deposits by individuals

Claims of individuals up to $2,225* for deposits for the purchase,l ease,or rental of property or services for personal,family, or household use,that were not delivered or provided. 11 U.S.C. § 507(a)(6).

Form 16E(04/04)

In re Case No.Debtor (if known)

El Alimony, Maintenance, or Support

Claims of a spouse, former spouse, or child of the debtor for alimony, maintenance, or support, to the extent provided in I I U.S.C. § 507(a)(7)

ED Taxes and Certain Other Debts Owed to Governmental Units

Taxes, customs duties, and penalties owing to federal, state, and local governmental units as set forth in 1 U.S.C. § 507(a)(8).

E] Commitments to Maintain the Capital of an Insured Depository Institution

Claims based on commitments to the FDIC, RTC, Director of the Office of Thrift Supervision, Comptroller of the Currency, or Board ofGovernors of the Federal Reserve System, or their predecessors or successors, to maintain the capital of an insured depository institution. I IU.S.C. § 507 (a)(9).

* Amounts are subject to adjustment on April 1, 2007,a nd every three years thereafter with respect to cases commenced on or after the date ofadjustment.

continuation sheets attached

Form B6E - Cont(04/04)

In re Case No.Debtor (If known)

SCHEDULE E - CREDITORS HOLDING UNSECURED PRIORITY CLAIMS(Continuation Sheet)

TYPE OF PRIORITY

CREDITOR'S NAME, 0 • DATE CLAIM WAS INCURRED WZ AMOUNT AMOUNTMAILING ADDRESS AND CONSIDERATION FOR • OF ENTITLED TO

INCLUDING ZIP CODE, W o • CLAIM CLAIM PRIORITY

AND ACCOUNT NUMBER z(See instructions.) 0 8

ACCOUNT NO.

ACCOUNT NO

ACCOUNT NO.

ACCOUNT NO.

ACCOUNT NO.

Sheet no of sheets attached to Schedule of Creditors Subtotal> $Holding P -o-rity • alims (Total of this page)

Totalp $(Use only on last page of the completed Schedule E.)

(Report total also on Summary of Schedules)


UNITED STATES BANKRUPTCY COURT DISTRICT OF PROOF OF CLAIM

Name of Debtor Case Number

NOTE- This form should not be used to make a claim for an administrative expense arising after the commencementof the case. A "request" for payment of an administrative expense may be filed pursuant to 11 U.S.C. § 503.

Name of Creditor (The person or other entity to whom the debtor owes 0 Check box if you are aware thatmoney or property). anyone else has filed a proof of

claim relating to your claim. Attachcopy of statement givingparticulars.

Name and address where notices should be sent: L3 Check box if you have neverreceived any notices from thebankruptcy court in this case.

II Check box if the address differsfrom the address on the envelope

Telephone number: sent to you by the court. THIS SPACE IS FOR COURT USE ONLY

Account or other number by which creditor identifies debtor: Check here E]replacesif this claim a previously filed claim, dated:D] amends

1. Basis for Claim

[1 Goods sold El Retiree benefits as defined in 11 U.S.C. § 1114(a)El Services performed ED Wages, salaries, and compensation (fill out below)El Money loaned Last four digits of SS #:El Personal injury/wrongful death Unpaid compensation for services performed[] Taxes from toE Other (date) (date)

2. Date debt was incurred: 3. If court judgment, date obtained:

4. Total Amount of Claim at Time Case Filed: $(unsecured) (secured) (priority) (Total)

If all or part of your claim is secured or entitled to priority, also complete Item 5 or 7 below.0 Check this box if claim includes interest or other charges in addition to the principal amount of the claim. Attach itemized statement of all

interest or additional charges.

5. Secured Claim. 7. Unsecured Priority Claim.11 Check this box if your claim is secured by collateral (including a El Check this box if you have an unsecured priority claim

right of setoff). Amount entitled to priority $.

Brief Description of Collateral: Specify the priority of the claim:El Real Estate ED Motor Vehicle El Wages, salaries, or commissions (up to $4,925),* earned within 90

[] Other days before filing of the bankruptcy petition or cessation of thedebtor's business, whichever is earlier - 11 U.S.C § 507(a)(3).

Value of Collateral: $_ El Contributions to an employee benefit plan - II U.S.C. § 507(a)(4).E] Up to $2,225* of deposits toward purchase, lease, or rental of

Amount of arrearage and other charges at time case filed included in property or services for personal, family, or household use - II U.S.C.secured claim, if any: $_ § 507(a)(6).

s, Alimony, maintenance, or support owed to a spouse, former spouse,or child - II U.S.C. § 507(a)(7).

6. Unsecured Nonpriority Claim $ ] Taxes or penalties owed to governmental units-ll U.S.C § 507(a)(8)

El Check this box if: a) there is no collateral or lien securing your E Other - Specify applicable paragraph of II U.S.C. § 507(a)(-).

claim, or b) your claim exceeds the value of the property securing it, or *Amounts are subject to adjustment on 4/1/07 and every 3 years thereafter withif c) none or only part of your claim is entitled to priority. respect to cases commenced on or after the date of adjustment

8. Credits: The amount of all payments on this claim has been credited and deducted for the purpose of making THIS SPACE IS FOR COURT USE ONLY

this proof of claim.

9. Supporting Documents: Attach copies of supporting documents, such as promissory notes, purchase

orders, invoices, itemized statements of running accounts, contracts, court judgments, mortgages, security

agreements, and evidence of perfection of lien. DO NOT SEND ORIGINAL DOCUMENTS. If the documents are

not available, explain. If the documents are voluminous, attach a summary.

10. Date-Stamped Copy: To receive an acknowledgment of the filing of your claim, enclose a stamped, self-

addressed envelope and copy of this proof of claim


this claim (attach copy of power of attorney, if any):

Penalty for presenting fraudulent claim Fine of up to $500,000 or imprisonment for up to 5 years, or both. 18 U.S.C. §§ 152 and 3571.


INSTRUCTIONS FOR PROOF OF CLAIM FoRMThe instructions and definitions below are general explanations of the law. In particular types of cases or circumstances, such as bankruptcy cases that

are not filed voluntarily by a debtor, there may be exceptions to these general rules.

- DEFINITIONS -

Debtor Secured Claim Unsecured Claim

The person, corporation, or other entity A claim is a secured claim to the extent If a claim is not a secured claim it is an

that has filed a bankruptcy case is that the creditor has a lien on property unsecured claim. A claim may be partly

called the debtor, of the debtor (collateral) that gives the secured and partly unsecured if the property

creditor the right to be paid from that on which a creditor has a lien is not worth

Creditor property before creditors who do not enough to pay the creditor in full.

A creditor is any person, corporation, have liens on the property. Unsecured Priority Claim

or other entity to whom the debtor Examples of liens are a mortgage on real Certain types of unsecured claims are givenowed a debt on the date that the estate and a security interest in a car, priority, so they are to be paid in bankruptcy

bankruptcy case was filed. truck, boat, television set, or other item cases before most other unsecured claims (if

Proof of Claim of property. A lien may have been there is sufficient money or propertyobtained through a court proceeding available to pay these claims). The most

A form telling the bankruptcy court before the bankruptcy case began; in common types of priority claims are listedhow much the debtor owed a creditor atthe time the bankruptcy case was filed a lien on the proof of claim form. Unsecured claims(the amount of the creditor's claim). In addition, to the extent a creditor also that are not specifically given priority status

This form must be filed with the clerk of owes money to the debtor (has a right by the bankruptcy laws are classified as

thi fonrmpty m oustbf wihe the cof setoff), the creditor's claim may be a Unsecured Nonpriority Claims.

thebankruptcy cot w he thed. secured claim. (See also Unsecuredbankruptcy case was filed.Clm.

Claim.)


Court, Name of Debtor, and Case Number: 5. Secured Claim:Fill in the name of the federal judicial district where the bankruptcy Check the appropriate place if the claim is a secured claim. You must

case was filed (for example, Central District of California), the state the type and value of property that is collateral for the claim,

name of the debtor in the bankruptcy case, and the bankruptcy case attach copies of the documentation of your lien, and state the amount

number. If you received a notice of the case from the court, all of past due on the claim as of the date the bankruptcy case was filed. A

this information is near the top of the notice, claim may be partly secured and partly unsecured. (See

Information about Creditor: DEFINITIONS, above).

Complete the section giving the name, address, and telephone 6. Unsecured Nonpriority Claim:

number of the creditor to whom the debtor owes money or Check the appropriate place if you have an unsecured nonpriority

property, and the debtor's account number, if any. If anyone else claim, sometimes referred to as a "general unsecured claim". (See

has already filed a proof of claim relating to this debt, if you never DEFINITIONS, above.) If your claim is partly secured and partly

received notices from the bankruptcy court about this case, if your unsecured, state here the amount that is unsecured. If part of your

address differs from that to which the court sent notice, or if this claim is entitled to priority, state here the amount not entitled to

proof of claim replaces or changes a proof of claim that was already priority.filed, check the appropriate box on the form. 7. Unsecured Priority Claim:

1. Basis for Claim: Check the appropriate place if you have an unsecured priority claim,

Check the type of debt for which the proof of claim is being filed. and state the amount entitled to priority. (See DEFINITIONS,If the type of debt is not listed, check "Other" and briefly describe above). A claim may be partly priority and partly nonpnority if, for

the type of debt. If you were an employee of the debtor, fill in the example, the claim is for more than the amount given priority by the

last four digits of your social security number and the dates of law. Check the appropriate place to specify the type of priority

work for which you were not paid. claim.


calculating the amount of your claim you have given the debtor credit3.CutJudgments: for all payments received from the debtor.

If you have a court judgment for this debt, state the date the court

entered the judgment. 9. Supporting Documents:You must attach to this proof of claim form copies of documents that

4. TtalAmout o Clam a Tim Cae Fied:show the debtor owes the debt claimed or, if the documents are too

Fill in the applicable amounts, including the total amount of the lengthy, a summary of those documents. If documents are not

entire claim. If interest or other charges in addition to the principal avaiabl, yoummust ath an uentio of whyeth are not

amount of the claim are included, check the appropriate place on available.

the form and attach an itemization of the interest and charges.

MEMORANDUM


FROM: JIM WANNAMAKER

RE: AMENDMENTS TO PROCEDURAL FORMS 132, 200, AND 201

DATE: MARCH 10, 2004

Recent increases in court fees and the privacy-related amendments to the rules and forms

have necessitated minor revisions in three Director's Procedural Forms. Details of the changes

are described below.

Director's Procedural Form 132, Application for Search of Bankruptcy Records, was

revised to reflect the November 1, 2003, increase in the search fee to $26.

On November 1, the miscellaneous administrative fee payable in all cases under title 11

was increased to $39. Director's Procedural Form 201, Notice to Individual Consumer Debtor,

recites the fees payable for filing for each chapter. The form was amended to state the new

amount.

The December 1, 2003, amendments to the Bankruptcy Rules and Official Forms require

all individual debtors to submit Official Form 21, Statement of Social Security Number.

Director's Procedural Form 200, Required Lists, Schedules, Statements and Fees, sets out the

documents which debtors must file and the fees which debtors must pay to file under each

chapter of the Bankruptcy Code. The form was revised to include the new form and the

increased amount of the administrative fee.

Copies of all three forms are attached.

B 132(11/03)

United States Bankruptcy CourtDistrict of

APPLICATION FOR SEARCH OF BANKRUPTCY RECORDS

Name of individual or business that is the subject Social Security No. or Employer Tax I.D. No. of

of the search: Subject:

Please search your records for the following information regarding the individual or business named above:

pending or closed bankruptcy cases in this district;

pending or closed adversary proceedings;

judgments/evidence of satisfaction of judgments; and

other [describe briefly]

Please search for the period from to

A fee of $26.00 is charged for each name or item searched. Payment by check or money order must be enclosed.

Please do not send cash through the mail.

Name, address, and phone number of the person requesting the search:

CERTIFICATE OF SEARCH

The undersigned clerk hereby certifies the following results of a diligent search of the records of the court:

[Check only the items for which a search was requested and a fee paid.]

A. Bankruptcy Cases:1. None found.2. Case filed on

(date)IJ Voluntary El Involuntary

E Pending D] Closed on(date)

E, Discharge granted on(date)

B. Adversary Proceedings:1. I None found.2. L Subject is a party to the following proceeding:

V.

(Plaintiff) (Defendant)

Adversary Proceeding Number _, filed on(date)

Pending Closed on(date)

Disposition: Dismissed on(date)

Final Judgment entered on (date)(date)

Case Number of Related Bankruptcy Case

Clerk of the Bankruptcy Court

By:

Date Deputy Clerk

B 20012/03) UNITED STATES BANKRUPTCY COURT

REQUIRED LISTS, SCHEDULES, STATEMENTS AND FEES

Voluntary Chapter 7 CaseEl Filing Fee of $155.

If the fee is to be paid in installments, the debtor must be an individual and must file a signed application for court approval Official Form 2 and Rule1006(b), Fed R Bankr.P

Ej Administrative fee of $39 and trustee surcharge of $15.These fees are payable in installments

O Voluntary Petition (Official Form 1).Names and addresses of all creditors of the debtor.Must be filed WITH the petition. Names and addresses not required if debtor files a schedule of liabilities with the petition. Rule 1007(a), Fed R.Bankr P

El Statement of Social Security Number (Official Form 21).Required if the debtor is an individual. Must be submitted WITH the petition. Rule 1007(f), Fed.R.Bankr.P.

0l Schedules of assets and liabilities (Official Form 6).Must be filed with the petition or within 15 days. Rule 1007(b) & (c), Fed.R.Bankr.P.

0l Schedule of executory contracts and unexpired leases (Schedule G of Official Form 6).Must be filed with the petition or within 15 days. Rule 1007(b) & (c), Fed.R.Bankr.P.

0l Schedules of current income and expenditures.All debtors must file these schedules. If the debtor is an individual, Schedules I and J of Official Form 6 must be used for this purpose Must be filed with thepetition or within 15 days. 11 U S.C. § 521(1) and Rule 1007(b) & (c), Fed.R.Bankr P

0l Statement of financial affairs (Official Form 7).Must be filed with the petition or within 15 days. Rule 1007(b) & (c), Fed.R.Bankr.P.

El Statement of intention regarding secured property (Official Form 8).Required ONLY if the debtor is an individual and the schedule of assets and liabilities contains consumer debts secured by property of the estate. Must befiled within 30 days or by the date set for the Section 341 meeting of creditors, whichever is earlier. 11 U.S.C. § 521(2).

El Statement disclosing compensation paid or to be paid to the attorney for the debtor.Must be filed within 15 days or any other date set by the court. II U S.C. § 329 and Rule 2016(b), Fed R Bankr.P

rl Statement disclosing compensation paid or to be paid to a "bankruptcy petition preparer" as defined in 11 U.S.C. § 110.Must be filed within 10 days. 11 U.S.C §110(h).

Voluntary Chapter 11 Case0l Filing fee of $8700.

If the fee is to be paid in installments, the debtor must be an individual and must file a signed application for court approval. Official Form 2 and Rule1006(b), Fed.R.Bankr.P

El Administrative fee of $39.This fee is payable in installments.

El Voluntary Petition (Official Form 1). o tNames and addresses of all creditors of the debtor.Must be filed WITH the petition. Names and addresses not required if debtor files a schedule of liabilities with the petition. Rule 1007(a), Fed R Bankr.P

El Statement of Social Security Number (Official Form 21).Required if the debtor is an individual. Must be submitted WITH the petition. Rule 1007(f), Fed.R.Bankr.P.

El List of Creditors holding the 20 largest unsecured claims (Official Form 4).Must be filed WITH the petition. Rule 1007(d), Fed.R.Bankr.P.

El Names and addresses of equity security holders of the debtor.Must be filed the petition or within 15 days, unless the court orders otherwise. Rule 1007(a)(3), Fed.R.Bankr.P.

El Schedules of assets and liabilities (Official Form 6).Must be filed with the petition or within 15 days. Rule 1007(b) & (c), Fed.R.Bankr.P.

0l Schedule of executory contracts and unexpired leases (Schedule G of Official Form 6).Must be filed with the petition or within 15 day. Rule 1007(b) & (c), Fed.R.Bankr.P.

El Schedule of current income and expenditures.All debtors must file these schedules. If the debtor is an individual, Schedules I and J of Official Form 6 must be used for this purpose. Must be filed with thepetition or within 15 days. 11 U S.C. § 521(1) and Rule 1007(b) & (e), Fed.R.Bankr.P.

El Statement of financial affairs (Official Form 7).Must be filed with the petition or within 15 days. Rule 1007(b) & (c), Fed R.Bankr P.

El Statement disclosing compensation paid or to be paid to the attorney for the debtor.Must be filed within 15 days or any other date set by the court. 11 U.S.C. § 329 and Rule 2016(b), Fed.R.Bankr.P.

El Statement disclosing compensation paid or to be paid to a "bankruptcy petition preparer" as defined in 11 U.S.C. § 110.Must be filed within 10 days. 11 U.S.C. §110(h).

Notice: Under 28 U S.C. § 1930(a) the debtor, or trustee if one is appointed, is required also to pay a fee to the United States trustee at the conclusion of eachcalendar quarter until the case is dismissed or converted to another chapter. The amount to be paid is:

$ 250 if disbursements total less than $15,000; $3750 if disbursements total between $300,000 and $1,000,000,$ 500 if disbursements total between $15,000 and $75,000; $5000 if disbursements total between $1,000,000 and $2,000,000,$ 750 if disbursements total between $75,000 and $150,000; $7500 if disbursements total between $2,000,000 and $3,000,000,$1250 if disbursements total between $150,000 and $225,000; $8000 if disbursements total between $3,000,000 and $5,000,000,$1500 if disbursements total between $225,000 and $300,000; $10,000 if disbursements total more than $5,000,000.

B 200 ,wintmued (12/03)

REQUIRED LISTS, SCHEDULES, STATEMENTS AND FEES

Chapter 12 CaseE] Filing Fee of $200.

If the fee is to be paid in installments, the debtor must be an individual and must file a signed application for court approval Official Form 2 and Rule1006(b), Fed R Bankr P.

o] Administrative fee of $39.This fee is payable in installments.

El Voluntary Petition (Official Form 1).Names and addresses of all creditors of the debtor.Must be filed WITH the petition Names and addresses not required if debtor files a schedule of liabilities with the petition. Rule 1007(a), Fed.R.Bankr P

El Statement of Social Security Number (Official Form 21).Required if the debtor is an individual. Must be submitted WITH the petition Rule 1007(f), Fed.R.Bankr.P.

0l Schedules of assets and liabilities (Official Form 6).Must be filed with the petition or within 15 days. Rule 1007(b) & (c), Fed.R.Bankr.P.

El Schedule of executory contracts and unexpired leases (Schedule G of Official Form 6).Must be filed with the petition or within 15 days. Rule 1007(b) & (c), Fed.R.Bankr.P.

E] Schedules of current income and expenditures.All debtors must file these schedules. If the debtor is an individual, Schedule I and J of Official Form 6 must be used for this purpose. Must be filed with thepetition or within 15 days. 11 U.S.C. § 521(l) and Rule 1007(b) & (c), Fed.R.Bankr.P.

E] Statement of financial affairs (Official Form 7).Must be filed with the petition or within 15 days. Rule 1007(b) & (c), Fed.R.Bankr.P.

El Statement disclosing compensation paid or to be paid to the attorney for the debtor.Must be filed within 15 days or any other date set by the court. 11 U.S.C. § 329 and Rule 2016(b), Fed.R.Bankr P.

El Statement disclosing compensation paid or to be paid to a "bankruptcy petition preparer" as defined in 11 U.S.C. § 110.Must be filed within 10 days II U.S.C. §110(h).

El Chapter 12 Plan.Must be filed within 90 days 11 U.S C. § 1221.

Chapter 13 CaseEl Filing fee of $155.

If the fee is to be paid in installments, the debtor must be an individual and must file a signed application for court approval. Official Form 2 and Rule1006(b), Fed R.Bankr.P.

El Administrative fee of $39.This fee is payable in installments.

El Voluntary Petition (Official Form 1).Names and addresses of all creditors of the debtor.Must be filed WITH the petition. Names and addresses not required if debtor files a schedule of liabilities with the petition. Rule 1007(a), Fed.R Bankr P

El Statement of Social Security Number (Official Form 21).Required if the debtor is an individual. Must be submitted WITH the petition. Rule 1007(f), Fed R.Bankr.P.

El Schedules of assets and liabilities (Official Form 6).Must be filed with the petition or within 15 days. Rule 1007(b) & (c), Fed.R.Bankr.P.

El Schedule of executory contracts and unexpired leases (Schedule G of Official Form 6).Must be filed with the petition or within 15 days. Rule 1007(b) & (c), Fed.R.Bankr.P.

0l Schedule of current income and expenditures.All debtors must file these schedules If the debtor is an individual, Schedules I and J of Official Form 6 must be used for this purposeMust be filed with the petition or within 15 days. 11 U.S.C. § 521(1) and Rule 1007(b) & (c), Fed.R Bankr.P

El Statement of financial affairs (Official Form 7).Must be filed with the petition or within 15 days. Rule 1007(b) & (c), Fed.R.Bankr.P..

El Chapter 13 Plan.Must be filed with the petition or within 15 days. Rule 3015, Fed.R.Bankr.P.

E] Statement disclosing compensation paid or to be paid to the attorney for the debtor.Must be filed within 15 days or any other date set by the court. 11 U.S.C. § 329 and Rule 2016(b), Fed.R Bankr P.

El Statement disclosing compensation paid or to be paid to a "bankruptcy petition preparer" as defined in 11 U.S.C. § 110.Must be filed within 10 days II U.S.C. § 110(h).

Involuntary Chapter 7 or 11 PetitionE] Filing fee of $155 for a Chapter 7 case or $800 for a Chapter 11 case.

Fee may not be paid in installments. Rule 1006(b), Fed.R.Bankr.P

El Administrative fee of $39.This fee may not be paid in installments Rule 1006(b), Fed.R.Bankr.P.

El Involuntary petition (Official Form 5).I1USC § 303.

B 201 (11/03)


NOTICE TO INDIVIDUAL CONSUMER DEBTOR

The purpose of this notice is to acquaint you with the four chapters of the federal

Bankruptcy Code under which you may file a bankruptcy petition. The bankruptcy

law is complicated and not easily described. Therefore, you should seek the advice

of an attorney to learn of your rights and responsibilities under the law should you

decide to file a petition with the court. Court employees are prohibited from giving

you legal advice.

Chapter 7: Liquidation ($155 filing fee plus $39 administrative fee plus $15 trustee surcharge)

1 Chapter 7 is designed for debtors in financial difficulty who do not have the ability to pay their existing debts.

2. Under chapter 7 a trustee takes possession of all your property. You may claim certain of your property as exempt under

governing law. The trustee then liquidates the property and uses the proceeds to pay your creditors according to priorities of the

Bankruptcy Code.

3. The purpose of filing a chapter 7 case is to obtain a discharge of your existing debts. If, however, you are found to have

committed certain kinds of improper conduct described in the Bankruptcy Code, your discharge may be denied by the court, and the

purpose for which you filed the bankruptcy petition will be defeated.

4. Even if you receive a discharge, there are some debts that are not discharged under the law. Therefore, you may still be

responsible for such debts as certain taxes and student loans, alimony and support payments, criminal restitution, and debts for death or

personal injury caused by driving while intoxicated from alcohol or drugs.

5. Under certain circumstances you may keep property that you have purchased subject to valid security interest. Your attorney

can explain the options that are available to you.

Chapter 13: Repayment of All or Part of the Debts of an Individual with Regular Income ($155 filing feeplus $39 administrative fee)

1. Chapter 13 is designed for individuals with regular income who are temporarily unable to pay their debts but would like to

pay them in installments over a period of time. You are only eligible for chapter 13 if your debts do not exceed certain dollar amounts

set forth in the Bankruptcy Code.

2. Under chapter 13 you must file a plan with the court to repay your creditors all or part of the money that you owe them,

using your future earnings. Usually, the period allowed by the court to repay your debts is three years, but no more than five years.

Your plan must be approved by the court before it can take effect.

3. Under chapter 13, unlike chapter 7, you may keep all your property, both exempt and non-exempt, as long as you continue

to make payments under the plan.

4. After completion of payments under your plan, your debts are discharged except alimony and support payments, student

loans, certain debts including criminal fines and restitution and debts for death or personal injury caused by driving while intoxicated

from alcohol or drugs, and long term secured obligations.

Chapter 11: Reorganization ($800 filing fee plus $39 administrative fee)

Chapter 11 is designed for the reorganization of a business but is also available to consumer debtors. Its provisions are quite

complicated, and any decision by an individual to file a chapter 11 petition should be reviewed with an attorney.

Chapter 12: Family Farmer ($200 filing fee plus $39 administrative fee)

Chapter 12 designed to permit family farmers to repay their debts over a period of time from future earnings and is in many ways

similar to chapter 13. The eligibility requirements are restrictive, limiting its use to those whose income arises primarily from a family

- owned farm.

I, the debtor, affirm that I have read this notice.

Date Signature of Debtor Case Number

WHITE - DEBTOR COPY PINK - COURT COPY

Form B202 -DRAFT--04/04

United States Bankruptcy CourtDistrict of

In re Case Number

Chapter

STATEMENT OF MILITARY SERVICE

The Servicemembers' Civil Relief Act of 2003, Pub. L. No. 108-189, provides for the temporary suspension

of certain judicial proceedings or transactions that may adversely affect military servicemembers, their dependents,and others. Debtors who may be eligible for relief under the act should complete this form and file it with the

Bankruptcy Court.

IDENTIFICATION OF SERVICEMEMBERU Self (Debtor or Codebtor)

Non - Debtor Spouse (name)_IJ Other (name of servicemember)

(servicemember's relationship to debtor)(type of joint liability)

TYPE OF MILITARY SERVICEU.S. Military Service (Army, Navy, Air Force, Marine Corps, or Coast Guard)

U Active Service since (date)

Inductee - ordered to report on (date)

J Retired / Discharged (date)

U.S. Military Reserves and National GuardU Active Service since (date)

[l Impending Active Service -orders postmarked _(date)Ordered to report on (date)

U Retired /Discharged (date)

Public Health Service, National Oceanic and Atmospheric Administration, or

U.S. Citizens Serving with Allied Forces (specify)L) Active Service since .(date)

J Retired/Discharged (date)

SIGNATURE OF DEBTOR

Debtor Date

This statement is for information use only. Filing this statement with the Bankruptcy Court does not constitute an

application for or invoke the benefits and relief available under the Servicemembers' Civil Relief Act of 2003.

LEONIDAS RALPH MECHAM ADMINISTRATIVE OFFICE OF THEDirector

UNITED STATES COURTS

CLARENCE A. LEE, JR.Associate Director WASHINGTON, D.C. 20544

February 17, 2004

MEMORANDUM TO: CHIEF JUDGES, UNITED STATES DISTRICT COURTSJUDGES, UNITED STATES DISTRICT COURTSUNITED STATES MAGISTRATE JUDGES

SUBJECT: The Servicemembers Civil Relief Act of 2003 (IMPORTANTINFORMATION)

On December 19, 2003, the President signed into law H.R. 100, the

Servicemembers Civil Relief Act of 2003, Pub. L. No. 108-189, 117 Stat. 2835 (the act),which revises the Soldiers' and Sailors' Civil Relief Act of 1940. The purpose of the act

is to provide for the temporary suspension of judicial and administrative proceedings and

transactions that may adversely affect servicemembers during their military service,thereby enabling them to devote their energy to the defense needs of the United States.

The act protects servicemembers, defined as members of the uniformed services on

active duty or under a call to active service in the National Guard, and commissionedofficers of the Public Health Service or the National Oceanic and AtmosphericAdministration in active service. The act's provisions are also extended to a

servicemember's dependants (spouse, children, and others). It applies to any civil judicial

or administrative proceeding commenced in any court or administrative agency of the

United States or of any state or subdivision, including any commonwealth, territory, or

possession of the United States and the District of Columbia. Therefore, the act applies to

matters before the United States district courts. The act is effective as ofDecember 19, 2003, and applies to any civil case that is not final before that date.

A TRADITION OF SERVICE TO THE FEDERAL JUDICIARY

The Servicemembers Civil Relief Act of 2003 Page 2

The attachment to this memorandum provides a general synopsis of the protectionsafforded to servicemembers by the act. Individual titles and sections of the act contain

specific requirements for granting relief to a servicemember, exceptions to granting such

relief, and penalties pursuant to title 18, United States Code, (including fines and or

imprisonment) for violation of the act. Therefore, you are strongly encouraged to read the

full text of the act, available from the Library of Congress at http://thomas.loc.gov.

If you have questions about the Servicemembers Civil Relief Act of 2003 or needassistance locating a copy of the law, please contact the Article III Judges Division at

(202) 502-1860 or the Magistrate Judges Division at (202) 502-1830.


Attachment

ATTACHMENT

Review of theServicemember's Civil Relief Act of 2003

A stay of proceedings, reopening of judgment, and other relief granted by theServicemember's Civil Relief Act of 2003, Pub. L. No. 108-189, 117 Stat. 2835 (2003)(the act), can be initiated at the court's discretion or upon application to the court by theservicemember or the servicemember's legal representative. The general standard forgranting such extraordinary relief is that the servicemember's military service materiallyaffects the servicemember's ability to defend a civil action or comply with the underlyingobligation. Additionally, many of the provisions of this act continue to apply followingthe servicemember's release from military service.

If the act permits or requires an application to be made to a court, and theunderlying matter is not before any court, such application may be made to any courtwhich would otherwise have jurisdiction over the matter.

The act provides, in part, as follows:

Default Judgments. Before entry of a default judgment, the plaintiff must filewith the court an affidavit indicating whether the defendant is or is not in militaryservice or that the plaintiff is unable to determine the defendant's military status.If the court cannot determine the defendant's military status based upon theaffidavit(s), it may require the plaintiff to post a bond before entry of a defaultjudgment. If it is later discovered that the defendant is in military service, the bondwould be available to indemnify the defendant servicemember against any loss ordamage suffered due to entry of a default judgment, should that default judgmentbe set aside.

If it appears that the defendant is in military service, the court may not enter ajudgment until after it appoints an attorney to represent the defendant. Further, thecourt may upon its own motion and shall upon application by counsel for thedefendant grant a stay of proceedings for a minimum period of 90 days if theremay be a defense to the action requiring the defendant's presence or if counsel isunable to contact the defendant or determine if a meritorious defense exists.

A servicemember or representative may apply to the court to reopen the defaultjudgment. The act authorizes a court to vacate or set aside a default judgment itentered against a servicemember during that servicemember's period of militaryservice plus 60 days to allow the servicemember to defend the action if it appears

that the military service interfered with the ability to defend the civil action and theservicemember has a meritorious or legal defense to the action. The actspecifically provides, however, that the rights, title, and interest acquired by a bonafide purchaser for value are not impaired by vacating the default judgment. Anapplication to reopen a default judgment must be made during or up to 90 daysafter the servicemember's military service.

Stay of Proceedings When Servicemember Has Notice. The act provides that atany stage before final judgment is entered in a civil action in which aservicemember is a party, the court may on its own motion or shall uponapplication of the servicemember (including supporting documentation) stay theaction for a period of not less than 90 days. An application for a stay ofproceedings does not constitute the servicemember's appearance or waiver of anysubstantive or procedural defenses. A servicemember may apply to the court foran extension of the initial stay. A court that refuses to grant an additional staymust appoint counsel to represent the servicemember in the action.

When a civil action is stayed pursuant to the act, penalties for the servicemember'snon-compliance with the underlying contract obligation shall not accrue during theperiod of the stay. Further, the court may reduce or waive any penalty incurred bythe servicemember during the period of military service for failure to performunder the terms of a contract, if the military service materially affected theservicemember's ability to perform the obligation.

Stay of Execution or Vacation of Judgment, Attachment, or Garnishment. Acourt may on its own motion or shall upon application stay the execution of anyjudgment or order entered against the servicemember and vacate or stay anattachment, garnishment of property or money, or debts in the possession of theservicemember or a third party, if it determines that the servicemember's ability tocomply with a court judgment or order is materially affected by military service.This court power extends to actions or proceedings commenced before, during, orup to 90 days after the defendant's military service. The stay of execution may beordered for the period of military service plus 90 days, or for any part thereof. Thecourt may order the servicemember to make installment payments to the plaintiffduring the stay period. With court approval, a plaintiff may proceed against non-military co-defendants.

Statute of Limitations. The act tolls the statute of limitations for bringing anycivil action or proceeding in a court by or against the servicemember or theservicemember's heirs, executors, administrators, or assigns during the

2

servicemember's period of military service (excluding any statute of limitationsunder the Internal Revenue Code).

Interest Cap. Interest on an obligation or liability, entered into by theservicemember or the servicemember and spouse jointly prior to theservicemember's entry into military service, can not bear interest in excess of sixpercent per year during the period of military service. Contract rate interest inexcess of six percent is forgiven. The amount of any periodic payment due underthe terms of the contract shall be reduced by the amount of the forgiven interest forthat payment period.

The servicemember must provide written notice and documentation to the creditorto access the limited interest rate provided by this act. A court, however, maygrant a creditor relief from the interest cap if it finds the servicemember's ability topay the contract rate of interest on the obligation is not materially affected bymilitary service.

Evictions and Distress. The act provides that, absent court order, a landlord maynot evict a servicemember or dependants from a primary residence for whichnormal monthly rent does not exceed $2,400 (subject to an annual price inflationadjustment) or subject the premises to a distress action. Upon application by thelandlord for an order permitting eviction or distress of the premises, the court mayon its own motion or shall on application of the servicemember stay an eviction orproceeding for distress, or may adjust the obligation under the lease to preserve theinterests of all parties. The court is empowered to grant equitable relief to alandlord if a stay of eviction is granted. An allotment from the servicemember'spay can be made to satisfy the terms of the court's order.

Protection Under Installment Contracts for Purchase or Lease. The actprovides that a contract for the purchase of real or personal property (including amotor vehicle) or the lease or bailment of such property, for which theservicemember made a deposit or installment payment before entering militaryservice, may not be rescinded or terminated for a breach of terms occurring beforeor during military service without court order. Likewise, the property may not berepossessed absent a court order. Courts are granted the authority to orderrepayment to the servicemember of installment payments or deposits as a conditionof termination of the contact, to stay the proceedings for an equitable period oftime, or to make other equitable disposition to preserve the interests of all parties.

3

Mortgages and Trust Deeds. In the case of a secured debt on real or personalproperty owned by the servicemember, which originated before the period ofmilitary service, the court may or shall upon application, after hearing, stay aproceeding to enforce the mortgage obligation brought during or within 90 daysafter the military service. Alternatively, the court may adjust the obligation topreserve the interests of all parties. Absent a court order or written agreementbetween the lender and the servicemember, a sale or foreclosure of the property forbreach of a mortgage or trust obligation is not valid if made during or within 90days after military service. As a condition of permitting foreclosure, repossession,or termination of the contract, the court may order the servicemember's equity inthe property (as valued by court appointed appraisers) to be paid to theservicemember or dependents.

Termination of Residential or Motor Vehicle Leases. A servicemember mayterminate a residential or automotive lease entered into before the start of militaryservice. Further, a servicemember, who executes a residential or automotive leaseand subsequently receives military orders for a permanent change of duty station orto deploy for a period of not less than 90 days, may terminate such lease. Aservicemember terminates a lease by delivery of written notice with documentationto the lessor, and by return of the motor vehicle not later than 15 days afterdelivery of the written notice. The act provides for payment of arrearage and otherobligations incurred by termination of the lease and for refund of rents or leasepayments made in advance.

Assignment of Insurance Policies. If, prior to entry into military service, aservicemember assigned a life insurance policy to secure payment of an obligation,the assignee may not, absent court order, exercise any right or option obtainedunder the assignment during the period of military service plus one year.Exceptions to the prohibition include: by written consent of the servicemember;when the premiums are due and unpaid; or upon the death of the insured. A courtmay refuse to grant the assignee leave to exercise its rights under the assignment ifthe court determines that the servicemember's ability to comply with the terms ofthe underlying obligation is materially affected by military service.

Enforcement of Storage Liens. A party that holds a lien on the property oreffects of a servicemember may not, absent court order, foreclose or otherwiseenforce any liens on such property during the servicemember's military serviceplus 90 days. The court may on its own motion or shall on application stay theforeclosure or adjust the obligation equitably.

4

Protection of Life Insurance. The act provides protection to the servicememberfor life insurance policies up to $250,000 in coverage and in force not less than180 days before the date of the insured's entry into military service and at the timeof application under the act. The insured, the insured's legal representative, or theinsured's beneficiary may apply in writing for protection of the life insurancecontract from lapse, termination, or forfeit for the nonpayment of a premium fromthe date of receipt of the application through the period of the insured's militaryservice plus two years. After receipt of the application, the Secretary of VeteransAffairs determines whether the particular insurance contract is entitled to suchprotection. The Secretary will notify the insured and insurer of the determination.The insured and the insurer are deemed to have constructively agreed to any policymodification.

Unpaid premiums due under a protected life insurance policy are to be treated as apolicy loan on the policy. If the policy matures during the protection period,unpaid premiums plus interest will be deducted from the insurance proceeds.

Unpaid premiums due on a policy protected by the act are guaranteed by theUnited States. The amount paid by the United States shall be treated as a debtowed to the United States by the servicemember. The United States may collectthe debt from the servicemember or offset the debt against funds owed to theservicemember.

Taxes and Assessments. The act addresses taxes or assessments (other thanincome tax) due and unpaid before or during the servicemember's period ofmilitary service. This includes taxes on personal property (e.g., an automobile tax)and real property taxes. Absent a court order, the servicemember's personal or realproperty may not be sold to enforce collection of such tax. Further, the court maystay a proceeding to enforce the collection of a tax or assessment during the periodof military service plus 180 days. Interest may accrue on the unpaid tax at a rate ofsix percent per year. If a servicemember's property is sold or forfeited to enforcethe collection of a tax or assessment, the servicemember has the right to redeemthe property or commence an action to redeem during the period of military serviceplus 180 days.

The act also addresses a servicemember's income taxes. It provides that upon theservicemember's notice to the taxing authority, the collection of income tax on theincome of a servicemember falling due before or during military service isdeferred for a period of not more than 180 days after the servicemember's releasefrom military service if the servicemember's ability to pay the income tax is

5

materially affected by military service. No interest or penalties accrue during thisdeferral period. However, the statute of limitations against the collection of anincome tax obligation deferred pursuant to this act is tolled for the period of theservicemember's military service plus 270 days.

The act also addresses the issue of a servicemember's residence and domicile withrespect to the person, personal property, and income of the servicemember due tothe servicemember's presence or absence in any jurisdiction of the United States incompliance with military orders.

Anticipatory Relief. The act provides that a servicemember may, during militaryservice or within 180 days following release from the military, apply to a court forrelief from any obligation or liability incurred by the servicemember before theservicemember's military service or from a tax or assessment falling due before orduring the servicemember's military service. Subject to the act's requirements andcourt determination, servicemembers are able to apply for relief before a defaultoccurs.

Business or Trade Obligations. The act provides that if a servicemember'sbusiness has an obligation or liability for which the servicemember is personallyliable, the servicemember's assets not held in connection with the business maynot be available for satisfaction of the business' obligation or liability during theservicemember's military service.

Protection of Persons Secondarily Liable on Servicemember's Obligations.The act permits a court to extend the protections granted to servicemembers to anypersons secondarily liable on the servicemember's obligations. Wheneverpursuant to the act a court stays, postpones, or suspends: (1) the enforcement of anobligation or liability; (2) the prosecution of a suit or proceeding; (3) the entry orenforcement of an order, writ, judgment, or decree; or (4) the performance of anyother act, the court may also grant such relief to a surety, guarantor, endorser,accommodation maker, comaker, or other person primarily or secondarily liable onthe obligation. Additionally, when a court vacates or sets aside the judgment ordecree entered against the servicemember, the court may set aside or vacate ajudgment or decree as to another person who is liable on the obligation.

A surety, guarantor, endorser, accommodation maker, comaker, or other personprimarily or secondarily liable on a servicemember's obligation may execute awaiver of these protections in a separate writing (with exceptions).

6

Bail Bond Not to be Enforced During Period of Military Service. A court maynot enforce a bail bond during the period of military service of the principal on thebond when the military service prevents the surety from obtaining the attendanceof the principal. The court may discharge the surety and exonerate the bail, inaccordance with principles of equity and justice, during or after the period ofmilitary service of the principal.

Waiver of Rights by a Servicemember. A servicemember may waive the rightsand protections provided by the act. A waiver permitting:

1) modification, termination, or cancellation of a contract, lease, bailment,obligation secured by a mortgage, or other security interest; or

2) permitting the repossession or foreclosure of property securing a debt

must be made in a separate writing, executed during or after the servicemember'speriod of military service.

Other Topics Addressed.

* Effect of Exercise of Rights under the Act (e.g. prohibition on future denialor revocation of credit based upon exercise of rights under the act)

6 U.S. Citizens Serving with Allied Forcese Co-Defendants Not in Military Service6 Extension of Protections to Reservists and Inducteese Rights in Public Lands H Desert Land Entries H Mining Claims H Mineral

Permits

7

Judge McFeeley and Professor Resnick will report orally on the Conferenceon Electronic Discovery sponsored by the Civil Rules Committee

Judge Montali will report on the recommendation that the Advisory Committeework with the Bankruptcy Committee to develop rules regarding venue

A report on the mega chapter 11 conference sponsored by the Federal JudicialCenter was distributed under separate cover

A report on the FJC survey of mandatory disclosure under Civil Rule 26 wasdistributed under separate cover

MEMORANDUM


FROM: JIM WANNAMAKER

RE: IMPLEMENTATION OF PRIVACY AMENDMENTS

DATE: MARCH 3,2004

Since December 1, 2003, when the privacy-related amendments to the Bankruptcy Rules

and Official Forms took effect, the Administrative Office has received a number of inquiries and

requests from the courts, the United States Trustee program, other government agencies, and

other organizations, including credit bureaus, concerning implementation of the changes. Many

of the inquiries concern access to the debtor's full Social Security number by entities that are not

scheduled as a creditor in the case or which prefer to use the debtor's Social Security number

(instead of the case number) to track the case. Several courts have asked what standards should

be used in considering applications for access to the information. Other inquiries concern how

the courts should treat amendments to Form 21, Statement of Social Security Number.

Typical questions include the following:

* Are interested parties (other than creditors) such as taxing authorities, potential

creditors, law enforcement agencies, regulatory agencies, and the like entitled to receive the

debtor's full Social Security number? If a local rule requires these parties to be included on the

mailing matrix, should they get the full number as a result of that inclusion?

* Who should notify creditors when the debtor amends his or her Statement of Social

1

Security Number? Who should notify the credit bureaus of the amended statement?

0 Is the submission of an amended Statement of Social Security Number noted on the

docket? As a public entry with no document attached or as a private entry accessible only to

court employees?

* What happens when the debtor adds a creditor after the clerk has mailed the meeting

of creditors notice?

* What happens if the debtor doesn't submit the Statement of Social Security Number

with the petition? Should the clerk defer sending the meeting of creditors notice? If the debtor

submits the statement a few days late, who notices creditors?

* Can the court give law enforcement agencies blanket access to the debtors' Social

Security numbers on a showing of good cause?

* What constitutes good cause for releasing the debtor's Social Security number?

* Can the debtor's attorney retain the signed paper copy of the Statement of Social

Security Number if the attorney submits the full Social Security number as part of filing the case

electronically?

2

COMMITTEE ON COURT ADMINISTRATION AND CASE MANA GEMENTof the

JUDICIAL CONFERENCE OF THE UNITED STATES

HONORABLE JOHN W LUNGSTRUM, CHAIR HONORABLE GLADYS KESSLER

HONORABLE W. HAROLD ALBRITTON HONORABLE JOHN G KOELTL

HONORABLE WILLIAM G. BASSLER HONORABLE SANDRA L LYNCH

HONORABLE PAUL D. BORMAN HONORABLE ILANA DIAMOND ROVNER

HONORABLE JERRY A DAVIS HONORABLE JOHN R. TUNHEIM

HONORABLE JAMES B HAINES, JR. HONORABLE T. JOHN WARD

HONORABLE TERRY J HATTER, JR. HONORABLE SAMUEL GRAYSON WILSON

MEMORANDUM TO: JUDGES, UNITED STATES BANKRUPTCY COURTS

CLERKS, UNITED STATES BANKRUPTCY COURTS

BANKRUPTCY ADMINISTRATORS

SUBJECT: Implementation of Judicial Conference Policy on Privacy and

Public Access to Electronic Case Files for Bankruptcy Cases

DATE: November 10, 2003

In September 2001, the Judicial Conference of the United States adopted a policy

regarding privacy and public access to electronic case files (the privacy policy). The privacy

policy contains several general principles which apply to all case file types. It also addresses

civil, criminal, bankruptcy and appellate cases separately, as it was determined that the various

case types, which contain diverse categories of information, can present different privacy issues.

Unless Congress acts to the contrary, the Federal Rules of Bankruptcy Procedure will be

amended December 1, 2003 to implement this privacy policy. Conforming amendments to the

Official Bankruptcy Forms will also take effect on December 1, 2003.

The Judicial Conference Committee on Court Administration and Case Management is

overseeing the implementation of the privacy policy in the courts. In March 2002 and April

2003, I sent memoranda to assist in the implementation of the policy for civil cases. This

memorandum is intended to assist in the implementation of the privacy policy for bankruptcy

cases.

The December 1, 2003 amendments to the Federal Rules of Bankruptcy Procedure and

Official Bankruptcy Forms are intended to implement the Judicial Conference privacy policy;

however, some documents not specifically addressed by the national rules or forms may contain

data that should be protected. When filing these documents, filers should comply with the

privacy policy and perform the appropriate redaction as explained further below. When filing

Official Bankruptcy Forms, filers should include the information requested on the Official Form.

BANKRUPTCY CASE FILES

The policy for bankruptcy case files is derivative of the policy for civil case files, which

states that documents in civil case files should be made available electronically to the same

extent that they are available at the courthouse, provided that certain "personal data identifiers"

are partially redacted by the litigants. These identifiers are Social Security numbers, dates of

birth, financial account numbers, and names of minor children. For bankruptcy case files, the

privacy policy provides:

that documents in bankruptcy case files should be made generally available

electronically to the same extent that they are available at the courthouse, with a

similar policy change for personal identifiers as in civil cases; that § 107(b)(2) of

the Bankruptcy Code should be amended to establish privacy and security

concerns as a basis for the sealing of a document; and that the Bankruptcy Code

and Rules should be amended as necessary to allow the court to collect a debtor's

full Social Security number but display only the last four digits.

While this policy was adopted in 2001, its implementation in the bankruptcy courts has

been delayed because of the necessary amendments to the Bankruptcy Code, Rules and

corresponding forms. On December 1, 2003, amendments to select rules, barring Congressional

action, and forms will become effective, thereby permitting implementation of those elements of

the policy which do not require amendment to the Bankruptcy Code. Specifically, rules 1005 and

1007 will be amended to restrict display of a debtor's Social Security number to only the last four

digits. Rule 2002 will be amended to provide that the debtor, creditor, case trustee and United

States trustee or bankruptcy administrator receive the debtor's full Social Security number on

their copy of the notice provided pursuant to 11 U.S.C. § 341. Additionally, the following

Official Bankruptcy Forms have been amended to require only the last four digits of the debtor's

Social Security and financial account numbers: 1, 3, 5, 6, 7, 8, 9, 10, 16A, 16C, and 19. A new

Official Form 21, entitled Statement of Social Security Number, has been created. To access

the full text of the rule and form amendments, except for the new Official Form 21, you may visit

the Rules Committee website at http://www.uscourts.gov/rules/index/html and click on "Pending

Rules Amendments Awaiting Final Action" and then select "Amendments Submitted to the

Judicial Conference (Sept. 2002)." Official Form 21 is available at the same web address by

clicking "Amendments Submitted to the Judicial Conference (Sept. 2003)." The Bankruptcy

Court Administration Division sent memoranda regarding the operational changes necessitated

by these amendments to all bankruptcy court clerks and bankruptcy administrators on July 24 and

October 31, 2003. We are continuing to work with Congress to achieve the necessary

amendments to the Bankruptcy Code.

The amendments to the Bankruptcy Rules and Official Forms will go a long way toward

protecting personal identifying information in bankruptcy case file documents. In order to

maximize the protection achieved by these amendments and to fully comply with the privacy

policy, all court users need to be made aware of these changes and of the fact that certain

2

personal data identifiers should be modified or partially redacted if they are included indocuments filed with the court. To assist your court in making all filers aware of this newpractice, the following two documents are attached for your use: Proposed Model Notice ofElectronic Availability of Case File Information, and Proposed Guideline for a Local Rule for

United States Bankruptcy Courts Addressing Judicial Conference Privacy Policy Regarding

Public Access to Electronic Case Files.

These documents will also assist courts in complying with the E-Government Act of 2002(Pub. L. No. 107-347) (the Act), which contains provisions relating to privacy protections andelectronic access to case file documents. The Act requires the development of national rules toaddress privacy and security concerns relating to the electronic filing of documents and thepublic availability of documents filed electronically or converted to electronic form. It specifiesthat if those rules provide for the redaction of information, they shall also allow a party wishingto file a document containing such information to file an unredacted copy of the document underseal, which the court must retain as a part of the record. The court has the discretion to require aparty to file a redacted copy of the same document for placement in the public file.

As noted above, the Judicial Conference policy requires litigants in bankruptcy cases tomodify or partially redact personal data identifiers, such as Social Security numbers and dates ofbirth, contained in documents that will be made available electronically. Although the E-Government Act permits the Judicial Conference to issue interim rules and interpretivestatements pending the adoption of rules, any interim provisions, as well as any rules or orders ofthe court, to the extent they provide for redaction of information, must be consistent with theAct's statutory redaction procedures outlined above. Thus, any local rule, order, or noticeaddressing redaction procedures must allow for the filing of unredacted versions of documentsunder seal as set forth in the statute. If you currently have redaction procedures in place, theyshould be amended to comply with these requirements immediately. The attached proposedguideline for a local rule can assist in amending redaction procedures to conform with therequirements of the E-Government Act.

We recognize that the E-Government Act's requirements do not mesh exactly with thejudiciary's privacy policy. The Judicial Conference and the Administrative Office were awarethat Congress was developing e-government legislation, and had commented on, and generallysupported, an earlier version of the legislation that allowed the Conference to develop its ownrules to address privacy and security concerns. The language of the E-Government Act regardingspecific redaction procedures was added to the legislation at the eleventh hour and withoutconsulting the judiciary. Efforts are under way to amend the current E-Government Act;however, it is not certain when or if such an amendment will become law.

3

If you have any questions regarding this memorandum, please contact Katie Simon of the

Court Administration Policy Staff at 202-502-1560; Mary Louise Mitterhoff and Mary Fritsche

of the Bankruptcy Court Administration Division at 202-502-1540; or James Wannamaker of the

Bankruptcy Judges Division at 202-502-1910.

JhW.Lungstrum

Attachments

cc: Circuit ExecutivesDistrict Court ExecutivesClerks, United States Courts

4

Attachment

Proposed Model Notice of Electronic Availability of Case File Information

For WebPACER/RACER Imaging Courts

The Office of the Clerk is now imaging pleadings for posting to WebPACER/RACER,

through the court's Internet website. Any subscriber to WebPACER will be able to read,

download, store and print the full content of imaged documents. The clerk's office is not imaging

or posting documents sealed or otherwise restricted by court order. In the future, we anticipate

accepting electronically filed documents and pleadings which will be available in the same

manner as imaged documents.

For CM/ECF Courts

The Office of the Clerk is now accepting electronically filed documents and pleadings

and making the content of these pleadings available on the court's Internet website via

WebPACER. Documents and pleadings filed on paper will be imaged, posted to WebPACER,and will be similarly available. Any subscriber to WebPACER will be able to read, download,store and print the full content of electronically filed documents. The clerk's office will not

make electronically available documents that have been sealed or otherwise restricted by court

order.

For All Courts

You should not include sensitive information in any document filed with the court unless

such inclusion is required by the Federal Rules of Bankruptcy Procedure or Official Bankruptcy

Forms or the inclusion is otherwise necessary and relevant to the case. You must remember that

any personal information not otherwise protected will be made available over the Internet via

WebPACER. If sensitive information must be included, the following personal data identifiers

must be partially redacted from the pleading, unless specifically required by statute, Federal Rule

of Bankruptcy Procedure or Official Bankruptcy Form, whether it is filed traditionally or

electronically: Social Security numbers, financial account numbers, dates of birth and the names

of minor children. (See Proposed Guideline for a Local Rule for United States Bankruptcy

Courts Addressing Judicial Conference Privacy Policy Regarding Public Access to Electronic

Case Files.)

In compliance with the E-Government Act of 2002, a party wishing to file a document

containing the personal data identifiers specified above may file an unredacted document under

seal. This document shall be retained by the court as part of the record. The court may, however,

also require the party to file a redacted copy for the public file.

In addition, exercise caution when filing documents that contain the following:

1) any personal identifying number, such as driver's license number;2) medical records, treatment and diagnosis;3) employment history;4) individual financial information; and5) proprietary or trade secret information.

Counsel is strongly urged to share this notice with all clients so that an informed decision

about the inclusion of certain materials may be made. If a redacted document is filed, it is the

sole responsibility of counsel and the parties to be sure that all documents and pleadings comply

with the rules of this court requiring redaction of personal data identifiers. (See Proposed

Guideline for a Local Rule for United States Bankruptcy Courts Addressing Judicial Conference

Privacy Policy Regarding Public Access to Electronic Case Files.) The clerk will not revieweach pleading for redaction.

2

Attachment

Proposed Guideline for a Local Rule for United States Bankruptcy Courts

Addressing Judicial Conference Privacy PolicyRegarding Public Access to Electronic Case Files

(This guidance does not apply to the petition, schedules, statement offinancial affairs, or

other documents which are part of the Official Bankruptcy Forms, as these documents have

been amended to comply with the Judicial Conference Privacy Policy)

To be inserted into the local rules of the court that address general rules of pleading in civil

cases:In compliance with the policy of the Judicial Conference of the United States, and the E-

Government Act of 2002, and in order to promote electronic access to case files while also

protecting personal privacy and other legitimate interests, parties shall refrain from including, or

shall partially redact where inclusion is necessary, the following personal data identifiers from all

documents and pleadings filed with the court, including exhibits thereto, whether filed

electronically or in paper, unless otherwise ordered by the Court or required by statute, the

Federal Rules of Bankruptcy Procedure or the Official Bankruptcy Forms.

a. Social Security numbers. If an individual's social security number must be included

in a pleading, only the last four digits of that number should be used.

b. Names of minor children. If the involvement of a minor child must be mentioned,only the initials of that child should be used. On Schedule I of Official Bankruptcy Form

6, list relationship and age of the debtor's dependents ( i.e., son, age 6).

c. Dates of birth. If an individual's date of birth must be included in a pleading, only the

year should be used. On Schedule I of Official Bankruptcy Form 6, list the age of each ofthe debtor's dependents.

d. Financial account numbers. If financial account numbers are relevant, only the last

four digits of these numbers should be used. On Schedules D, E, and F of Official

Bankruptcy Form 6, debtors, if they so choose, may include their full account numbers to

assist the trustee and creditors.

In compliance with the E-Government Act of 2002, a party wishing to file a document

containing the personal data identifiers listed above may file an unredacted document under seal.

This document shall be retained by the court as part of the record. The court may, however, still

require the party to file a redacted copy for the public file.

The responsibility for redacting these personal identifiers rests solely with counsel and the

parties. The Clerk will not review each document for compliance with this rule.

Report of the Judicial Conference Committee on Court Administration and CaseManagement on Privacy and Public Access to Electronic Case Files

* The Judicial Conference of the United States requested that its Committee on Court

Administration and Case Management examine issues related to privacy and public access to

electronic case files. The Committee on Court Administration and Case Management formed a

special subcommittee for this purpose. This subcommittee, known as the Subcommittee on

Privacy and Public Access to Electronic Case Files, consisted of four members of the Committee

on Court Administration and Case Management: Judge John W. Lungstrum, District of Kansas,

Chair; Judge Samuel Grayson Wilson, Western District of Virginia; Judge Jerry A. Davis,Magistrate Judge, Northern District of Mississippi; and Judge J. Rich Leonard, Bankruptcy

Judge, Eastern District of North Carolina, and one member from each of four other Judicial

Conference Committees (liaison Committees): Judge Emmet Sullivan, District of Columbia,liaison from the Committee on Criminal Law; Judge James Robertson, District of Columbia,liaison from the Committee on Automation and Technology; Judge Sarah S. Vance, Eastern

District of Louisiana, liaison from the Committee on the Administration of the BankruptcySystem; and Gene W. Lafitte, Esq., Liskow and Lewis, New Orleans, Louisiana, liaison from the

Committee on the Rules of Practice and Procedure. After a lengthy process described below, the

Subcommittee on Privacy and Public Access to Electronic Case Files, drafted a report containing

recommendations for a judiciary-wide privacy and access policy.

The four liaison Committees reviewed the report and provided comments on it to the fullCommittee on Court Administration and Case Management. After carefully considering these

comments, as well as comments of its own members, the Committee on Court Administrationand Case Management made several changes to the subcommittee report, and adopted theamended report as its own.

Brief History of the Committee's Study of Privacy Issues

The Committee on Court Administration and Case Management, through its Subcommittee onPrivacy and Public Access to Electronic Case Files (the Subcommittee) began its study ofprivacy and security concerns regarding public electronic access to case file information in June1999. It has held numerous meetings and conference calls and received information from expertsand academics in the privacy arena, as well as from court users, including judges, court clerks,and government agencies. As a result, in May 2000, the Subcommittee developed several policy

options and alternatives for the creation of a judiciary-wide electronic access privacy policywhich were presented to the full Committee on Court Administration and Case Management and

the liaison committees at their Summer 2000 meetings. The Subcommittee used the opinions andfeedback from these committees to further refine the policy options.

In November 2000, the Subcommittee produced a document entitled "Request for Comment onPrivacy and Public Access to Electronic Case Files." This document contains the alternatives the

Subcommittee perceived as viable following the committees' feedback. The Subcommitteepublished this document for public comment from November 13, 2000 through January 26, 2001.

A website at www.privacy.uscourts.gov was established to publicize the comment document andto collect the comments. Two hundred forty-two comments were received from a very wide

range of interested persons including private citizens, privacy rights groups, journalists, private

investigators, attorneys, data re-sellers and representatives of the financial services industry.

Those comments, in summary and full text format, are available at that website.

On March 16, 2001, the Subcommittee held a public hearing to gain further insight into the

issues surrounding privacy and access. Fifteen individuals who had submitted written comments

made oral presentations to and answered the questions of Subcommittee members. Following the

hearing, the Subcommittee met, considered the comments received, and reached agreement on

the policy recommendations contained in this document.

Background

Federal court case files, unless sealed or otherwise subject to restricted access by statute, federal

rule, or Judicial Conference policy, are presumed to be available for public inspection and

copying. See Nixon v. Warner Communications, Inc., 435 U.S. 589 (1978) (holding that there is

a common law right "to inspect and copy public records and documents, including judicial

records and documents"). The tradition of public access to federal court case files is also rooted

in constitutional principles. See Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 575-78(1980). However, public access rights are not absolute, and courts balance access and privacy

interests in making decisions about the public disclosure and dissemination of case files. Theauthority to protect personal privacy and other legitimate interests in nondisclosure is based, like

public access rights, in common law and constitutional principles. See Nixon, 435 U.S. at 596

("[E]very court has supervisory power over its own records and files, and access has been deniedwhere court files might have become a vehicle for improper purposes").

The term "case file" (whether electronic or paper) means the collection of documents officiallyfiled by the litigants or the court in the context of litigation, the docket entries that catalog such

filings, and transcripts of judicial proceedings. The case file generally does not include severalother types of information, including non-filed discovery material, trial exhibits that have notbeen admitted into evidence, drafts or notes by judges or court staff, and various documents that

are sometimes known as "left-side" file material. Sealed material, although part of the case file, is

accessible only by court order.

Certain types of cases, categories of information, and specific documents may require specialprotection from unlimited public access, as further specified in the sections on civil, criminal,bankruptcy and appellate case files below. See United States Department of Justice v. ReportersCommittee for Freedom of the Press, 489 U.S. 749 (1989) (noting that technology may affect thebalance between access rights and privacy and security interests). To a great extent, theserecommendations rely upon counsel and litigants to act to protect the interests of their clients and

themselves. This may necessitate an effort by the courts to educate the bar and the public aboutthe fact that documents filed in federal court cases may be available on the Internet.

It is also important to note that the federal courts are not required to provide electronic access tocase files (assuming that a paper file is maintained), and these recommendations do not createany entitlement to such access. As a practical matter, during this time of transition when courts

are implementing new practices, there may be disparity in access among courts because ofvarying technology. Nonetheless, the federal courts recognize that the public should share in the

benefits of information technology, including more efficient access to court case files.

These recommendations propose privacy policy options which the Committee on Court

Administration and Case Management (the Committee) believes can provide solutions to issues

of privacy and access as those issues are now presented. To the extent that courts are currently

experimenting with procedures which differ from those articulated in this document, those courts

should reexamine those procedures in light of the policies outlined herein. The Committee

recognizes that technology is ever changing and these recommendations may require frequent re-

examination and revision.

Recommendations

The policy recommended for adoption by the Judicial Conference is as follows:

General Principles

There should be consistent, nationwide policies in federal courts in order to ensure

that similar privacy protections and access presumptions apply regardless of

which federal court is the custodian of a particular case file.

Notice of these nationwide policies should be given to all litigants in federal court so

that they will be aware of the fact that materials which they submit in a federalcourt proceeding could become available on the Internet.

Members of the bar must be educated about the policies and the fact that they mustprotect their clients by carefully examining the documents that they file in federal

court for sensitive, private information and by making the appropriate motions to

protect documents from electronic access when necessary.

• Except where otherwise noted, the policies apply to both paper and electronic files.

Electronic access to docket sheets through PACERNet and court opinions throughcourt websites will not be affected by these policies.

• The availability of case files at the courthouse will not be affected or limited bythese policies.

Nothing in these recommendations is intended to create a private right of action or tolimit the application of Rule 11 of the Federal Rules of Civil Procedure.

Case Types

Civil Case Files

Recommendation: That documents in civil case files should be made availableelectronically to the same extent that they are available at the courthouse with oneexception (Social Security cases should be excluded from electronic access) and one changein policy (the requirement that certain "personal data identifiers" be modified or partially

redacted by the litigants). These identifiers are Social Security numbers, dates of birth,

financial account numbers and names of minor children.

The recommendation provides for liberal remote electronic access to civil case files while also

adopting some means to protect individual privacy. Remote electronic access will be available

only through the PACERNet system which requires registration with the PACER service center

and the use of a log in and password. This creates an electronic trail which can be retraced in

order to determine who accessed certain information if a problem arises. Further, this

recommendation contemplates that certain personal, identifying information will not be included

in its full and complete form in case documents, whether electronic or hard copy. For example, if

the Social Security number of an individual must be included in a document, only the last four

digits of that number will be used whether that document is to be filed electronically or at the

courthouse. If the involvement of a minor child must be mentioned, only that child's initials

should be used; if an individual's date of birth is necessary, only the year should be used; and, if

financial account numbers are relevant, only the last four digits should be recited in the

document. It is anticipated that as courts develop local rules and instructions for the use and

implementation of Electronic Case Filing (ECF), such rules and instructions will include

direction on the truncation by the litigants of personal identifying information. Similar rule

changes would apply to courts which are imaging documents.

Providing remote electronic access equal to courthouse access will require counsel and pro se

litigants to protect their interests through a careful review of whether it is essential to their case to

file certain documents containing private sensitive information or by the use of motions to seal

and for protective orders. It will also depend upon the discretion of judges to protect privacy and

security interests as they arise in individual cases. However, it is the experience of the ECFprototype courts and courts which have been imaging documents and making them electronicallyavailable that reliance on judicial discretion has not been problematic and has not dramaticallyincreased or altered the amount and nature of motions to seal. It is also the experience of thosecourts that have been making their case file information available through PACERNet that therehave been virtually no reported privacy problems as a result.

This recommended "public is public" policy is simple and can be easily and consistently applied

nationwide. The recommended policy will "level the geographic playing field" in civil cases infederal court by allowing attorneys not located in geographic proximity to the courthouse easyaccess. Having both remote electronic access and courthouse access to the same information willalso utilize more fully the technology available to the courts and will allow clerks' offices to

better and more easily serve the needs of the bar and the public. In addition, it might alsodiscourage the possible development of a "cottage industry" headed by data re-sellers who, ifremote electronic access were restricted, could go to the courthouse, copy the files, download theinformation to a private website, and charge for access to that website, thus profiting from thesale of public information and undermining restrictions intended to protect privacy.

Each of the other policy options articulated in the document for comment presented its ownproblems. The idea of defining what documents should be included in the public file was rejectedbecause it would require the courts to restrict access at the courthouse to information that hastraditionally been available from courthouse files. This would have the net effect of allowing less

overall access in a technological age where greater access is easy to achieve. It would also require

making the very difficult determination of what information should be included in the public file.

The Committee seriously considered and debated at length the idea of creating levels of access to

electronic documents (i.e., access to certain documents for specific users would be based upon

the user's status in the case). The Committee ultimately decided that levels of access restrictions

were too complicated in relation to the privacy benefits which could be derived therefrom. It

would be difficult, for example, to prohibit a user with full access to all case information, such as

a party to the case, from downloading and disseminating the restricted information. Also, the

levels of access would only exist in relation to the remote electronic file and not in relation to the

courthouse file. This would result in unequal remote and physical access to the same information

and could foster a cottage industry of courthouse data collection as described above.

Seeking an amendment to the Federal Rules of Civil Procedure was not recommended for several

reasons. First, any such rules amendment would take several years to effectuate, and theCommittee concluded that privacy issues need immediate attention. There was some discussionabout the need for a provision in Fed. R. Civ. P. 11 providing for sanctions against counsel or

litigants who, as a litigation tactic, intentionally include scurrilous or embarrassing, irrelevantinformation in a document so that this information will be available on the Internet. TheCommittee ultimately determined that, at least for now, the current language of Fed. R. Civ. P.11 and the inherent power of the court are sufficient to deter such actions and to enforce anyprivacy policy.

As noted above, this recommendation treats Social Security cases differently from other civilcase files. It would limit remote electronic access. It does contemplate, however, the existence ofa skeletal electronic file in Social Security cases which would contain documents such as thecomplaint, answer and dispositive cross motions or petitions for review as applicable but not theadministrative record and would be available to the court for statistical and case managementpurposes. This recommendation would also allow litigants to electronically file documents,except for the administrative record, in Social Security cases and would permit electronic accessto these documents by litigants only.

After much debate, the consensus of the Committee was that Social Security cases warrant such

treatment because they are of an inherently different nature from other civil cases. They are thecontinuation of an administrative proceeding, the files of which are confidential until thejurisdiction of the district court is invoked, by an individual to enforce his or her rights under agovernment program. Further, all Social Security disability claims, which are the majority ofSocial Security cases filed in district court, contain extremely detailed medical records and otherpersonal information which an applicant must submit in an effort to establish disability. Suchmedical and personal information is critical to the court and is of little or no legitimate use toanyone not a party to the case. Thus, making such information available on the Internet would beof little public benefit and would present a substantial intrusion into the privacy of the claimant.Social Security files would still be available in their entirety at the courthouse.

Bankruptcy Case Files

Recommendation: That documents in bankruptcy case files should be made generally

available electronically to the same extent that they are available at the courthouse, with a

similar policy change for personal identifiers as in civil cases; that § 107(b)(2) of the

Bankruptcy Code should be amended to establish privacy and security concerns as a basis

for the sealing of a document; and that the Bankruptcy Code and Rules should be amended

as necessary to allow the court to collect a debtor's full Social Security number but display

only the last four digits.

The Committee recognized the unique nature of bankruptcy case files and the particularly

sensitive nature of the information, largely financial, which is contained in these files; while this

recommendation does provide open remote electronic access to this information, it also

accommodates the privacy concerns of individuals. This recommendation contemplates that a

debtor's personal, identifying information and financial account numbers will not be included in

their complete forms on any document, whether electronic or hard copy (i.e., only the last four

digits of Social Security and financial account numbers will be used). As the recommendationrecognizes, there may be a need to amend the Bankruptcy Code to allow only the last four digits

of an individual debtor's Social Security number to be used. The bankruptcy court will collect the

full Social Security number of debtors for internal use, as this number appears to provide the best

way to identify multiple bankruptcy filings. The recommendation proposes a minor amendmentto § 107(a) to allow the court to collect the full number, but only display the last four digits. The

names of minor children will not be included in electronic or hard copies of documents.

As with civil cases, the effectiveness of this recommendation relies upon motions to seal filed by

litigants and other parties in interest. To accomplish this result, an amendment of 11 U.S.C.

§ 107(b), which now narrowly circumscribes the ability of the bankruptcy courts to sealdocuments, will be needed to establish privacy and security concerns as a basis for sealing adocument. Once again, the experiences of the ECF prototype and imaging courts do not indicatethat this reliance will cause a large influx of motions to seal. In addition, as with all remoteelectronic access, the information can only be reached through the log-in and password-controlled PACERNet system.

The Committee rejected the other alternatives suggested in the comment document for variousreasons. Any attempt to create levels of access in bankruptcy cases would meet with the sameproblems discussed with respect to the use of levels of access for civil cases. Bankruptcy casespresent even more issues with respect to levels of access because there are numerous interestswhich would have a legitimate need to access file information and specific access levels wouldneed to be established for them. Further, many entities could qualify as a "party in interest" in a

bankruptcy filing and would need access to case file information to determine if they in fact havean interest. It would be difficult to create an electronic access system which would allowsufficient access for that determination to be made without giving full access to that entity.

The idea of collecting less information or segregating certain information and restricting accessto it was rejected because the Committee determined that there is a need for and a value in

allowing the public access to this information. Further, creating two separate files, one totally

open to the public and one with restricted access, would place a burden on clerks' offices by

requiring the management of two sets of files in each case.

Relevant websites:

http://www.uscourts.gov/cmecf/cmecf html

http://www.privacv.uscourts.gov/

http://www.pacer.psc.uscourts.gov/

2

Courts Currently Operational on CM/ECF

* Courts Accepting Electronic Filing

District Courts

Alabama Southern* Puerto RicoCalifornia Central South Dakota*California Northern* Texas EasternConnecticut* Texas NorthernDistrict of Columbia* Virginia WesternFlorida Northern* Washington Western*Illinois Southern Wisconsin Eastern*Indiana Northern* WyomingIndiana Southern*Iowa Northern* Court of International TradeKansas* Court of Federal Claims*Kentucky EasternKentucky WesternMaryland*Maine*Massachusetts*Michigan EasternMichigan Western*MinnesotaMissouri Eastern*Missouri Western*Nebraska*New HampshireNew Jersey*New York Eastern*New York Northern*New York Southern*New York Western*Ohio Northern*Ohio Southern*Oklahoma WesternOregon*Pennsylvania Eastern*Pennsylvania Middle*

3

Courts Currently Operational on CM/ECF

* Courts Accepting Electronic Filing

Bankruptcy Courts

Alabama Middle* Nevada*Alabama Northern New Hampshire*Alabama Southern* New Jersey*Alaska* New York Eastern*Arizona* New York Northern*Arkansas Eastern* New York Southern*Arkansas Western* New York Western*California Northern North Carolina MiddleCalifornia Southern* North Carolina Western*Colorado* Ohio Northern*Connecticut Ohio Southern*Delaware* Oklahoma EasternDistrict of Columbia Oklahoma Northern*Florida Middle* OregonFlorida Northern* Pennsylvania Eastern*Georgia Northern* Pennsylvania MiddleHawaii* Pennsylvania Western*Illinois Northern Rhode Island*Illinois Southern* South Carolina*Indiana Northern* South Dakota*Iowa Northern* Tennessee Western*Iowa Southern* Texas Eastern*Kansas Texas Northern*Kentucky Eastern* Texas Southern*Kentucky Western* Texas Western*Louisiana Eastern* Utah*Louisiana Middle* Vermont*Louisiana Western* Virginia Eastern*Maine* Wisconsin EasternMaryland* Washington Western*Massachusetts* West Virginia Northern*Michigan Western* West Virginia Southern*Mississippi Northern Wisconsin Western*Missouri Eastern* Wyoming*Missouri Western*Montana*Nebraska*

4

Courts Currently in the Process of Implementing CM/ECF

District Courts Bankruptcy CourtsAlabama Middle California Central Tennessee EasternAlabama Northern California Eastern Tennessee MiddleCalifornia Eastern Florida Southern Virginia WesternColorado Georgia Middle Washington EasternDelaware Georgia SouthernFlorida Middle GuamGeorgia Middle Illinois CentralGeorgia Northern Indiana SouthernGuam Michigan EasternIllinois Central MinnesotaIllinois Northern Mississippi SouthernIowa Southern New MexicoLouisiana Middle North Carolina EasternLouisiana Western North DakotaMississippi Northern Puerto RicoMississippi SouthernOklahoma NorthernTennessee EasternTennessee WesternTexas SouthernTexas WesternUtahVermontWashington EasternWest Virginia NorthernWest Virginia Southern

5

0- C:) 0) )

I I

- C D

... ... .

0 0El)

cO-.-

Itz

'%W

4114

UJ

41

AL At

MEMORANDUM

DATE: March 4, 2004


SUBJECT: Supreme Court Opinion Concerning the Effect of a Bankruptcy Rule


On January 14, 2004, the Supreme Court ruled unanimously that the time limit for filing acomplaint objecting to discharge in Rule 4004(a) is "unalterable" except as provided in the Rule

4004(b), resolving a conflict among the circuits concerning whether the time limits in Rules 4004and 4007(c) are subject to equitable exceptions. The opinion, by Justice Ginsburg, discusses atlength the effect and enforceablility of the bankruptcy rules. A copy of the Court's decision in

Kontrick v. Ryan, __ U.S. __,124 S.Ct. 906 (2004), is attached.

Attachment

906 124 SUPREME COURT REPORTER

thefirm(

HoldGinsito r(

objecraisees m

ing I?

Affirr

1. FeC

feder,U.S.C

2. Fef

Cproce(courts

or wit]

3. Bai

Rtor toconcerlack ofsame

Andrew J. KONTRICK, Petitioner, 4004(a,

V. 4. FedLiRobert A. RYAN. lack of

No. 02-819. time inArgued Nov. 3, 2003. highest

Decided Jan. 14, 2004. 5. Fed(Background: Creditor filed adversary Sucomplaint objecting to Chapter 7 debtor's be atta(discharge. The United States BankruptcyCourt for the Northern District of Illinois, 6. BanJJohn D. Schwartz, J., denied discharge on Ba,ground of transfers with intent to defraud for cre(creditor. Debtor appealed. The District serve tiCourt, Harry D. Leinenweber, J., 2001WL 630676, affirmed. Debtor appealed. The syThe United States Court of Appeals for ort

Report

- KONTRICK v. RYAN 907Cite as 124 S.Ct. 906 (2004)

the Seventh Circuit, 295 F.3d 724, af- form objecting creditor of time he has tofirmed. Certiorari was granted. file complaint; (2) they instruct court on

Holding: The Supreme Court, Justice limits of its discretion to grant motions forGinsburg, held that: debtor forfeits right complaint-filing-time enlargements; and (3)to rely on time limit for creditor to file they afford debtor affirmative defense toobjections to discharge if debtor does not complaint filed outside time limits. Fed.raise issue before bankruptcy court reach- Rules Bankr.Proc.Rules 4004(a, b),es merits of creditor's objection, abrogat- 9006(b)(3), 11 U.S.C.A.ing In re Coggin, 30 F.3d 1443.

7. Bankruptcy Ar3312Debtor forfeits right to rely on time

limit for creditor to file objections to dis-1. Federal Courts *81.1 charge if debtor does not raise issue before

Only Congress may determine lower bankruptcy court reaches merits of credi-federal court's subject-matter jurisdiction. tor's objection; abrogating In re Coggin, 30

U.S.C.A. Const. Art. 3, § 1. F.3d 1443.

2. Federal Courts e-1.1 Syllabus *

Court-prescribed rules of practice and A creditor in Chapter 7 liquidationprocedure for cases infederal district proceedings has "60 days after the firstcourts and courts of appeals do not create date set for the meeting of creditors" toor withdraw federal jurisdiction. file a complaint objecting to the debtor's

3. Bankruptcy 0-3312 discharge. Fed. Rule Bkrtcy. Proc.

Rules governing time limit for credi- 4004(a). The bankruptcy court may ex-tor to file objections to discharge do not tend that period "for cause" on motionconcern court's subject-matter jurisdiction, "filed before the time has expired." Fed.lack of which can be raised at any time in Rule Bkrtcy. Proc. 4004(b). Reinforcingsame action. Fed.Rules Bankr.Proc.Rules Rule 4004(b)'s restriction on extension of

Petitioner, 4004(a, b), 9006(b)(3), 11 U.S.C.A. the Rule 4004(a) deadline, Rule 9006(b)(3)allows enlargement of "the time for taking

4. Federal Courts ,&29.1, 542 action" under Rule 4004(a) "only to theLitigant generally may raise court's extent and under the conditions stated in

time in same civil action, even initially at 4004(b).

)03. highest appellate instance. On April 4, 1997, petitioner Kontrick!004. 5. Federal Courts -&-29.1 filed a Chapter 7 bankruptcy petition. Af-ed adversary Subject-matter jurisdiction may not ter gaining three successive time exten-ster 7 debtor's be attacked collaterally. sions from the Bankruptcy Court, respon-

ýs Bankruptcy dent Ryan, Kontrick's creditor, filed arict of Illinois, 6. Bankruptcy 0:3312 complaint on January 13, 1998, objectingI discharge on Bankruptcy rules governing time limit to Kontrick's discharge. Ryan allegedent to defraud for creditor to file objections to discharge that Kontrick had transferred property,

The District serve three primary purposes: (1) they in- within one year of filing his petition, withýber, J., 2001

o The syllabus constitutes no part of the opinion the reader. See United States v. Detroit Tim-of the Court but has been prepared by the ber & Lumber Co., 200 U.S. 321, 337, 26 S.Ct.

)f Appeals for Reporter of Decisions for the convenience of 282, 50 L.Ed. 499.

[53'


the intent to defraud creditors, and there- Kontrick had waived the right to assert lit:

fore did not qualify for discharge under 11 the untimeliness of the amended complaint ofU.S.C. §§ 727(a)(2)-(5). Ryan filed an by failing squarely to raise the point be- litamended complaint on May 6, 1998, with fore the court reached the merits of Lleave of court, but without seeking or gain- Ryan's objections to discharge. The Dis-ing a court-approved time extension. The trict Court sustained the denial of dis-t

amended complaint alleged with particu- charge, and the Seventh Circuit affirmed. itolarity that Kontrick had fraudulently Both courts relied on decisions of sister Ufltransferred money to his wife, first by Circuits holding that the timeliness provi- tinremoving his own name from the family's sions at issue are not "jurisdictional." aplonce-joint checking account, then by con- Held: A debtor forfeits the right totritinuing regularly to deposit his salary Held:o A debtor0forfeitsdtheoright tochecks into the account, from which his rely on Rule 4004 if the debtor does not

raise the Rule's time limitation before the mawife routinely paid family expenses (thepr

"family-account" claim). Kontrick's June bankruptcy court reaches the merits of thecreditor's objection to discharge. Pp. 914- be10, 1998, answer to the amended complaint 91e

did not raise the untimeliness of the fami- 918. litilly-account claim; on the merits, the an- (a) Only Congress may determine aswer admitted the transfers to the family lower federal court's subject-matter juris- paraccount but denied that Kontrick had vio- diction. U.S. Const., Art. III, § 1. Con- feitlated § 727(a)(2)(A). In response to gress did so, as pertinent here, by instruct- tooRyan's summary judgment motion, which ing that "objections to discharges" areappended a statement of material facts, "[c]ore proceedings" within the bankruptcyKontrick cross-moved to strike portions of courts' , jurisdiction. 28 U.S.C. conRyan's summary judgment filings, but did § 157(b)(2)(J). Congress did not build litignot ask the court to strike the amended time constraints into that statutory author- claicomplaint's family-account allegations. On ization. Rather, the time constraints ap- liti,February 25, 2000, the Bankruptcy Court plicable to objections to discharge are con- Theawarded Ryan summary judgment on the tained in Bankruptcy Rules prescribed cas(family-account claim, concluding that Kon- pursuant to § 2075. Such rules "do not andtrick was not entitled to discharge because create or withdraw federal jurisdiction." mathis transfers to the family account were Owen Equipment & Erection Co. v. Kro- affilmade with intent to defraud at least credi- ger, 437 U1S. 365, 370, 98 S.Ct. 2396, 57 outs,tor Ryan. Kontrick then moved for recon- L.Ed.2d 274. As Bankruptcy Rule 9030 limisideration. For the first time, Kontrick states, the Bankruptcy Rules "shall not be hisurged that the court was powerless to construed to extend or limit the jurisdic- chaiadjudicate the family-account claim. The tion of the courts." The filing deadlines urg(amended complaint containing that claim, prescribed in Rules 4004 and 9006(b)(3) couiKontrick observed, was untimely under are claim-processing rules that do not de- areRules 4004(a) and (b) and 9006(b)(3). lineate what cases bankruptcy courts are equiThose rules, Kontrick maintained, estab- competent to adjudicate. Although Kon- involish a mandatory, unalterable time limit of trick now concedes that those Rules are othethe kind Kontrick called "jurisdictional." not properly labeled "jurisdictional" in the theThe Bankruptcy Court denied reconsidera- sense of describing a court's subject-mat- conttion and entered final judgment, holding ter jurisdiction, he maintains that the anytthat Rule 4004's complaint-filing time in- Rules have the same import as provisions stan

- structions are not "jurisdictional," and that governing subject-matter jurisdiction. A ing

[541

KONTRICK v. RYAN 909Cite as 124 S.Ct. 906 (2004)

to ase litigant generally may raise a court's lack question is whether Kontrick forfeited hiscomplairi | f subject-matter jurisdiction at any time right to assert the untimeliness of Ryan'spoint befy 'in the same civil action. Mansfield, C. & amended complaint by failing to raise thenerits- of - L.M.R. Co. v. Swan, 111 U.S. 379, 382, 4 issue until after that complaint was adjudi-The Dis- - S.Ct. 510, 28 LEd. 462. Similarly, Kon- cated on the merits. In other words, how

trick urges, a debtor may challenge a cred- long did the affirmative defense RulesII of dis o,-,

affirmed: itor's objection to discharge as untimely 4004(a) and (b) and 9006(b)(3) affordedof sister- , under Rules 4004 and 9006(b)(3) at any Kontrick linger in the proceedings? The

ýss provi- time in the proceedings, even initially on Seventh Circuit followed the proper pathappeal or certiorari. The equation Kon- on this key question. It noted that time

right to trick advances overlooks the critical differ- bars generally must be raised in an answerdoes not ence between a rule governing subject- or responsive pleading. See Fed. Rule

'efore the matter jurisdiction and an inflexible claim- Civ. Proc. 8(c) (made applicable to bank-its of the processing rule. Characteristically, a ruptcy court adversary proceedings byPp. 914- court's subject-matter jurisdiction cannot Fed. Rule Bkrtcy. Proc. 7008(a)). Anbe expanded to account for, the parties' answer may be amended to include anlitigation conduct; a claim-processing rule, inadvertently omitted affirmative defense,ermine a on the other hand, even if unalterable on a and even after the time to amend "of

.ter juris- party's application, can nonetheless be for- course" has passed, "leave [to amend] shalli 1. Con- feited if the party asserting the rule waits be freely given when justice so requires."instruct- too long to raise the point. Pp. 914-916. Fed. Rule Civ. Proc. 15(a) (made applica-

ges" areLnkruptcy (b) No reasonable construction of ble to adversary proceedings by Fed. Rule

U.S.C. complaint-processing rules would allow a Bkrtcy. Proc. 7015). Kontrick not onlyot build litigant situated as Kontrick is to defeat a failed to assert the time constraints of

y author- claim, as filed too late, after the party has Rules 4004(a) and (b) and 9006(b)(3) in a-aints ap- litigated and lost the case on the merits. pleading or amended pleading responsiveare con- The relevant claim-processing rules in this to Ryan's amended complaint. In addi-

rescribed case, Bankruptcy Rules 4004(a) and (b) tion, Kontrick moved to delete certain"do not and 9006(b)(3), include, among their pri- items from Ryan's summary judgment fil-

sdiction." mary purposes, affording the debtor an ings, but, even that far into the litigation,v. Kro- affirmative defense to a complaint filed he did not ask the Bankruptcy Court to

2396, 57 outside the Rules 4004(a) and (b) time strike the family-account claim. Ordinari-'.ule 9030 limits. It is uncontested that Ryan filed ly, a defense is lost if it is not included inill not be his complaint objecting to Kontrick's dis- the answer or amended answer. See Fed.jurisdic- charge outside those limits. Kontrick Rule Bkrtcy. Proc. 7012(b) (Fed. Rules

deadlines urges that nothing occurring thereafter Civ. Proc. 12(b)-(h) apply in adversary pro-1006(b)(3) counts, for the Rules' time prescriptions ceedings). Rules 12(h)(2) and (3) prolongo not de- are unalterable, allowing no recourse to the life of certain defenses, but time pre-)urts are equitable exceptions. This case, however, scriptions are not among them. Even if aigh Kon- involves no issue of equitable tolling or any defense based on Bankruptcy Rule 4004ules are other equity-based exception. Neither at could be equated to "failure to state a

il" in the the time Ryan filed the amended complaint claim upon which relief can be granted,"ject-mat- containing the family-account claim nor the issue could be raised, at the latest, "atthat the anytime thereafter did he assert circum- the trial on the merits." Fed. Rule Civ.rovisions stances-equitable or otherwise--qualify- Proc. 12(h)(2). Only lack of subject-matterýtion. A ing him for a time extension. The sole jurisdiction is preserved post-trial. Fed.

[551

I I I I I I I I II7I


Rule Civ. Proc. 12(h)(3). Kontrick's resis- days after the first date set for the meet- der § 72tance to the family-account claim is not of ing of creditors" to file a complaint object- debts exithat order. Pp. 916-918. ing to the debtor's discharge. Fed. Rule bankrupt

295 F.3d 724, affirmed. Bkrtcy. Proc. 4004(a). That period may gations §

GINSBURG, J., delivered the opinion be extended "for cause" on motion "filed discharge

for a unanimous Court. before the time has expired." Fed. Rule A debtiBkrtcy. Proc. 4004(b). In the matter be- the trust(fore us a creditor, in an untimely' pleading, any credi

E. King Poor, for petitioner. objected to the debtor's discharge. The "objectio'r

James R. Figliulo, for respondent. debtor, however, did not promptly move to vided, isdismiss the creditor's plea as impermissi- jurisdictic

Kent L.uJones, fo Unecitlved Stthes bly late. Only after the Bankruptcy Court U.S.C. §aCuscuportia, be rspeial leae f he decided, on the merits, that the discharge er, specifCourt, supporting the respondent. should be refused did the debtor, in a plaint obj

E. King Poor, Counsel of Record, Kim- motion for reconsideration, urge the un- Instead, tball R. Anderson,- Michael J. Stepek, Lau- timeliness of the creditor's plea. are contUra D. Cullison, Winston & Strawn, LLP, BankruptcChicago, Illinois, Counsel for Petitioner Bankruptcy Rule 4004's time prescrip- 4 004(a) arAndrew J. Kontrick. tion, the debtor maintains, is "jurisdiction- In rehi

al," i.e., dispositive whenever raised in the 4 ( st.Michael A. Pollard, Anthony G. Stamato, proceedings. Rejecting the debtor's "ju- 4004(a) st

Baker & McKenzie, Chicago, Illinois, G. risdictional" characterization, the courts the debtoEric Brunstad, Jr., Bingham McCutchen, below held that Rule 4004's time prescrip- the- CodeLLP, Hartford, Connecticut, James R. Fi- tion could not be invoked to upset an adju- days aftergliulo, Counsel of Record, James H. Bow- dication on the merits. We agree that ing of cre(hay, Catherine Tetzlaff, Figliulo & Silver- Rule 4004 is not "jurisdictional." Affirm- extension,man, P.C., Chicago, Illinois, Counsel for ing the judgment of the Court of Appeals line, proviRespndet. ig te jugmet o theCout ofAppalsextend thRespondent. for the Seventh Circuit, we hold that a file a corn

For U.S. Supreme Court briefs, see: debtor forfeits the right to rely on Rule the motio

2003 WL 21396448 (Pet.Brief 4004 if the debtor does not raise the Rule's expired."time limitation before the bankruptcy stred."

2003 WL 22038388 (Pet.Brief) court reaches the merits of the creditor's striction c

2003 WL 21714998 (Resp.Brief) objection to discharge. loss or

Justice GINSBURG delivered the §§ 727(aý

opinion of the Court. I 2. Section

This case concerns the duration of a A debtor in a Chapter 7 liquidation case discharge

right to object to a pleading on the ground qualifies for an order discharging his debts 2ucstoms

that it was filed out of time. Under the if he satisfies the conditions stated in for mornBankruptcy Rules governing Chapter 7 § 727(a) of the Bankruptcy Code. 11 false reliquidation proceedings, a.creditor has "60 U.S.C. § 727(a).' A discharge granted un- § 523(a)(

mer spou

1. Under § 727(a), the court may not grant a records; (4) has knowingly (A) given a false port of sdischarge of any debts if the debtor, inter alia: oath or account, (B) presented or used a false (debts foi(1) is not an individual; (2) has, with intent to claim, (C) attempted to obtain money by act- debtor").

defraud a creditor, concealed, transferred, or ing or forbearing to act, or (D) withheld docu-destroyed property of -the estate (A) in the ments relating to the debtor's property or the sameyear preceding bankruptcy or (B) during the financial affairs; or (5) has failed to explain a sa'bankruptcy case; (3) has destroyed books or plaints ta

[56]


meet- der § 727(a) frees the debtor from all deadline, Rule 9006(b)(3) allows enlarge-

bject- debts existing at the commencement of the ment of "the time for taking action" under

Rule bankruptcy proceeding other than obli- Rule 4004(a) "only to the extent and under

[ may gations § 523 of the Code excepts from the conditions stated in [that rule]," i.e.,

"filed discharge. § 727(b).2 only as permitted by Rule 4004(b).3

Rule A debtor's discharge may be opposed by

ýr be- the trustee, the United States trustee, or II

Wding, any creditor. § 727(c)(1). Adjudication of On April 4,1997, petitioner, Dr. Andrew

The "objections to discharg[e]," Congress pro- J. Kontrick, filed a Chapter 7 bankruptcy•ve to vided, is a "[c]ore proceedin[g]" within themissi- jurisdiction of the bankruptcy courts. 28 petition. Respondent, Dr. Robert A.

Court U.S.C. § 157(b)(2)(J). No statute, howev- Ryan, a major creditor and Kontrick's for-mer associate in a cosmetic and plastic

harge er, specifies a time limit for filing a corn-

in a plaint objecting to the debtor's discharge. surgery practice, opposed Kontrick's dis-

,e un- Instead, the controlling time prescriptions charge. After gaining three successive

are contained in the Federal Rules of time extensions from the BankruptcyBankruptcy Procedure, specifically, Rules Court, Ryan filed an original complaint on

!scrip- 4004(a) and (b) and 9006(b)(3). January 13, 1998, in which he objected to

iction- the discharge of any of Kontrick's debts.

in the In relevant part' Bankruptcy Rule Ryan alleged that Kontrick had trans-

s "ju- 4004(a) states: "[A] complaint objecting to ferred property, within one year of filingcourts the debtor's discharge under § 727(a) of the bankruptcy petition, with intent to de-scurts- the. Code shall be filed no later than 60 fraud creditors, and therefore did not qual-

adju- days after the first date set for the meet- ify for a discharge under 11 U.S.C.

that ing of creditors." Rule 4004(b), governing §8 727(a)(2)-(5). App. to Pet. for Cert. 40.extensions of the Rule 4004(a) filing dead-

ffirm- line, provides: "[T]he court may for cause Ryan filed an amended complaint on

ppeals extend the time [Rule 4004(a) allows] to May 6, 1998, with leave of court, ibid., but

lhat a file a complaint objecting to discharge" if without seeking or gaining a court-ap-

Rule the motion is "filed before the time has proved time extension. The amended

Rule's expired." Reinforcing Rule 4004(b)'s re- complaint particularized for the first time

ruptcy striction on extension of the Rule 4004(a) the debtor's violation of § 727(a)(2)(A) in

ditor's

loss or deficiency of assets. 11 U.S C. debt pursuant to 11 U.S.C. § 523(c). See

§§ 727(a)(1)-(5). supra, at 911, n. 2. Rule 4007(c) tracks Rules4004(a) and (b), and Rule 9006(b)(3) lists

2. Section 523 categorizes debts that are non- Rule 4007(c) as well as Rule 4004(a) among

n case dischargeable. See, e.g., 11 U.S.C. time prescriptions bankruptcy courts may en-

debts § 523(a)(1) (certain debts "for a tax or a large "only to the extent and under the condi-

customs duty"); § 523(a)(2)(A) (certain debts tions stated [in the rules themselves]." Be-Led in for money obtained by "false pretenses, a cause of the practical identity of the time

le. 11 false representation, or actual fraud"); prescriptions for objections to the discharge

ed un- § 523(a)(5) (certain debts "to a spouse, for- of any debts under § 727(a) and for objec-

mer spouse, or child of the debtor" for "sup- tions to the discharge of particular debts un-

a false port of such spouse or child"); § 523(a)(6) der § 523(c), courts have considered deci-

a false (debts for "willful and malicious injury by the sions construing Rule 4007(c) in determiningby act- debtor") whether the time limits delineated in Rules

b docu- 4 004(a) and (b) may be forfeited. See, e g., In

3. Under Bankruptcy Rule 4007(c), essentially re Kontrick, 295 F.3d 724, 730, n. 3 (C.A.7erty or the same time prescriptions apply to com- 2002) (citing In re Santos, 112 B.R. 1001.

:plain a plaints targeting the discharge of a particular 1004, n. 2 (C.A.9 BAP 1990)).

[57]


this regard: Debtor Kontrick, creditor 3-4, he did not ask the court to strike el,

Ryan alleged, had fraudulently transferred those allegations. His response, instead, at

money to Kontrick's wife, first by remov- and in line with Local Rule 402(N), ad- W.

ing Kontrick's own name from the family's dressed the substance of the family-ac- ar

once-joint checking account, then by con- count claim. He admitted taking his name K

tinuing regularly to deposit his salary off the account, but observed that he did

checks into the account, from which his so "over four years before bankruptcy." tb

wife routinely paid family expenses (the Id., at 13. He also acknowledged that, fo

"family-account" claim). Id., at 52-53.' • thereafter, he "deposited his paycheck into tr

Kontrick answered Ryan's amended the account the same way he had always P1

complaint on June 10, 1998. His answer done." Ibid. ac

"did not raise the untimeliness of [the fam- On February 25, 2000, the Bankruptcy

fly-account] claim," Brief for Petitioner 4; Court ruled on the cross-motions, granting

on the merits, he admitted the transfers to in part Kontrick's motion to strike, award- en

the family account but denied violating i TI

§ 727(a)(2)(A). In March 1999, after the ing summary judgment to Ryan on the fil

parties engaged in acrimonious discovery, family-account claim, and dismissing the

Ryan moved for summary judgment. As remaining claims. The court used the tiamended complaint as its baseline; it

Local Bankruptcy Rule 402(M) (Bkrtcy. struck as untimely "allegations not includ- ar

Ct. ND II1.1994) instructs, RYan appended ed in [that] complaint." App. to Pet. for

to his motion "a statement of material thCert. 47; see id., at 48-5O. Homing in on

facts as to which [he] contend[ed] there Kontrick's continuing deposits into the ac-

[was] no genuine issue." Kontrick cross- count from which he had removed his

moved, in August 1999, to strike portions

of Ryan's summary judgment filings, name, the court concluded that KontrickofRyan's sumaryon soughad transferred property with intent "to di

Kontrick's motion to' strike sought dele- hinder, delay or defraud at least [creditor] T

tion of "new allegations," i.e., allegations Ryan." Id., at 55. That course of conduct,

making their first appearance in the litiga- coupled with Kontrick's testimony,5 the D

tion in Ryan's summary judgment submis- court concluded, sufficed to prove a viola-

sions-Ryan's statement of facts pursuant tion of § 727(a)(2) (described supra, at

to Local Rule-402(M), accompanying exhib- 910, n. 1). App. to Pet. for Cert. 55, 64.

its, and corresponding portions of the sum- Accordingly, the court held, Kontrick was

mary judgment motion and memorandum. not entitled to a discharge of his debts.

Motion to Strike and Response to [Ryan's]

Statement of Facts Under Local Rule 402 Kontrick moved for reconsideration. He 6.

N in No. 97 B 10353 (Bkrtcy. Ct. ND Ill.), argued that the Bankruptcy Court lacked

pp. 2, 5, 26. Although Kontrick noted that jurisdiction over the sole claim on which

the family-account allegations were stated the court had granted summary judgment,

only in the amended complaint and were the family-account claim. See id., at 71.

absent from the original complaint, id, at The court was powerless to adjudicate the

4. Although Kontrick took his name off the 5. In a pre-bankruptcy deposition, Kontrick 7

family bank account some four years prior to admitted he transferred the once-joint bank

his bankruptcy petition, his salary check de- account' to his wife to prevent his creditors

posits continued into the one-year period pre- from attaching the funds. See App. to Pet.

ceding bankruptcy specified in 11 U.S.C. for Cert. 53; 295 F.3d, at 727-728K

§ 727(a)(2)(A) (described supra, at 910, n. 1).

See App. to Pet. for'Cert. 33, 52-531

(58] •


t to strik e * Y_ claim, Kontrick insisted, because the and Farouki v. Emirates Bank Int'l Ltd.,se, instead' amended complaint containing the claim 14 F.3d 244i 248 (C.A.4 1994)); accord,102(N), ad: was untimely. Governing Rules 4004(a) App. to Pet. for Cert. 31-32. Both courts

family-ac- and (b) and 9006(b)(3), see supra, at 911, also agreed with the Bankruptcy Courtig his name. Kontrick maintained, establish a mandato- that Kontrick had waived the right to chal-that he did ry, unalterable time limit of the kind he lenge Ryan's amended complaint as imper-ankruptcy." then called "jurisdictional." App. to Pet. missibly late.Adged that. for Cert. 71. It was the, first time Kon- The Seventh Circuit found in Kontrick'sycheck into trick appended a jurisdictional label to any papers opposing summary judgment noth-had always pleading he filed relating to the family- ing that placed in issue the timeliness of

account claim. allegations in the amended complaint. 295

Bankruptcy The Bankruptcy Court denied the recon- F.3d, at 735. Instead, according to theis, granting sideration motion on June 8, 2000, and Court of Appeals, Kontrick apparently ac-

ike, award- entered final judgment five days later. cepted creditor Ryan's amended complaint

ýan on the The court held that Rule 4004's complaint- as properly filed; Kontrick used that com-

nissing the filing time instructions are not "jurisdic- plaint, not the original complaint, as a

used the tional," and that Kontrick had waived the baseline to object to new allegations Ryan

,aseline; it right to assert the untimeliness of the made for the first time in his statement of

not includ- amended complaint by failing squarely to facts supporting summary judgment.

to Pet. for raise the point before the court reached Ibid. The Seventh Circuit further com-

)ming in on the merits of Ryan's objections to dis- mented that "[t]he policy concerns of expe-

into the ac- charge. ditious administration of bankruptcy mat-

ýmoved his The District Court sustained the Bank- ters and the finality of the bankruptcy

at Kontrick ruptcy Court's decision denying Kontrick's court's decision hardly are fostered by re-

t intent "to discharge. App.. to Pet. for Cert. 25-38. quiring the bankruptcy court to consider

At [creditor] The Court of Appeals ?or the Seventh Cir- the timeliness of an issue that it already

of conduct, cuit, in turn, affirmed the judgment of the has adjudicated." Ibid.

mony,5 the District Court. In re Kontrick, 295 F.3d We granted certiorari in view of theove a viola- 724 (C.A.7 2002). Both courts relied on division of opinion on whether Rule 4004 is

supra, at decisions of sister Circuits holding that "jurisdictional," ' 538 U.S. 998, 123 S.Ct.,ert. 55, 64. "the timeliness provisions at issue here are 1899, 155 L.Ed.2d 824 (2003),*and we nowontrick was not jurisdictional." Id., at 733 (citing In re affirm the judgment of the Seventh Cir-

his debts. Benedict, 90 F.3d 50, 54-55 (C.A.2 1996), cuit. 7

!ration. He 6. Compare, e.g., In re Coggin, 30 F.3d 1443, allegations as untimely, he had also sufficient-

ourt lacked 1450-1451 (C.A.11 1994) (referring to Rule ly raised the untimeliness of the family ac-n on which 4004(b) as a "jurisdictional requirement" and count claim."). Kontrick's notation that thejudgment, a "jurisdictional bar"), with, e.g., In re Bene- family-account claim was absent from the

dict, 90 F.3d 50, 54 (C.A.2 1996) ("time peri- original complaint, the courts below agreed,id., at 71. od imposed by Rule 4007(c) is not jurisdic- fell short of an argument that the claim was

judicate the tional"). untimely. 295 F.3cd, at 735; App. to Pet. forCert. 72. We have no cause to disturb that

)n, Kontrick 7. On brief and at oral argument, counsel for determination. In any event, we train our:e-joint bank Kontrick suggested that, by noting that the attention on the question Kontrick here pre-his creditors family-account claim was not stated in the sented: "[W]hether the deadline set by RuleApp. to Pet original complaint, Kontrick had implicitly 4004 is mandatory and jurisdictional and thus

8. invited dismissal of the claim. See Tr. of Oral cannot be waived." Brief for Petitioner i. SeeArg. 5; Brief for Petitioner 5 ("Kontrick also Pet. for Cert. i. We note, too, that theargued that in opposing Ryan's many other question whether the family-account claim

[59]


III U.S. 365, 370, 98 S.Ct. 2396, 57 L.Ed.2d[1] Only Congress may determine a 274 (1978). As Bankruptcy Rule 9030 tit

lower federal court's subject-matter juris- states, the Bankruptcy Rules "shall not bediction. U.S. Const., Art. III, § 1. Con- construed to extend or limit the jurisdic-gress did so with respect to bankruptcy tion of the courts." Rule 9030's forerun- hacourts in Title 28 (Judiciary and Judicial ner-its counterpart in the Federal Rules reProcedure); in cataloging core bankruptcy of Civil Procedure, Rule 82-similarly usproceedings, Congress authorized bank- states: "These rules shall not be construed enruptcy courts to adjudicate, inter alia, ob- to extend or limit the jurisdiction of the coljections to discharge. See 28 U.S.C. United States district courts.... " See 12 ob,55 157(b)(1) and (b)(2)(I) and (J). Certain C. Wright, A. Miller, & R. Marcus, Feder- MEstatutory provisions governing bankruptcy al Practice and Procedure § 3141, pp. 484- Er,courts contain built-in time constraints. 485 (2d ed. 1997) ("Rule 82 states [the] 10(For example, § 157(c)(1) addresses de important principle" that "[t]he rules tatnovo district court review of bankruptcy merely prescribe the method by which the ha,court findings and conclusions in noncore jurisdiction granted the courts by Con- ce(proceedings; that provision confines re- gress is to be exercised."); Schacht v. re,view to "matters to which any party has United States, 398 U.S. 58, 64, 90 S.Ct. Pr,timely and specifically objected." * The 1555, 26 L.Ed.2d 44 (1970) ("The procedur- "mprovision conferring' jurisdiction over ob- al rules adopted by the Court for the Sthjections to discharge, however, contains no orderly transaction of its business are not 80timeliness condition. Section 157(b)(2)(J) jurisdictional...."). In short, the filing fseinstructs only that "objections to discharg- deadlines prescribed in Bankruptcy Rules 41Ves" are "[core proceedings" within the 4004 and 9006(b)(3) are claim-processing (1qjurisdiction of the bankruptcy courts. rules that do not delineate what cases obj

[2]' The time constraints applicable to bankruptcy courts 4re competent to adju- dieobjections to discharge are contained in dicate. fileBankruptcy Rules prescribed by this byCourt for "the practice and procedure in [3] This much is common ground. didcases under title 11." 28 U.S.C. § 2075; Kontrick does not contend in this Court tio]cf. § 2072 (similarly providing for -Court- that the timing rules in question affect the toprescribed "rules of practice and proce- subject-matter jurisdiction of the bank- U.dure" for cases in the federal district ruptcy courts. See Tr. of Oral Arg. 9 L.icourts arid courts of appeals). "[I1t is (acknowledging that "[t]his case does not ingaxiomatic" that such rules "do not create deal with subject matter jurisdiction"); id., rigor withdraw federal jurisdiction." Owen at 9-10 (explaining that counsel for Kon- rEquipment & Erection Co. v. Kroger, 437 trick used the word "jurisdiction" "as a teCa

could properly "relate back" to the original begun within six months after .. notice of (GIcomplaint was neither raised in the Seventh final 'denial of the claim by the agency to wo

' Circuit, 295 F.3d, at 729, n. 2, nor aired in which it was presented"); and § 2107(a) usE', ~this Court, see Tr. of Oral Arg. 33. ("Except as otherwise provided in this sec-

8. Provisions of'a similar order, with built-in tion, no appeal shall bring any judgment,time constraints, 'include 28 U.S.C. § 2401(b) order or decree in an action, suit or proceed- scr(tort claim against United States "shall be ing of a civil nature before a court of appeals (suforever barred" unless presented "to the ap- ,for review unless notice of appeal is filed,propriate Federal agency within two years within thirty days after the entry of such judg- 9.after [the] claim accrues" or civil action "'is ment, order or decree."). n

A

[601>.


L.Ed.2d J shorthand" to indicate a nonextendable sons (personal jurisdiction) falling within ale 9030 , time limit). court's adjudicatory authority.11 not bejurisdic- Courts, including this Court, it is true, [ 5] Though Kontrick concedes that

forerun- have been less than meticulous in this Rules 4004 and 9006(b)(3) are not properly

al Rules regard; they have more than occasionally labeled "jurisdictional" in the sense of de-

3imilarly used the term "jurisdictional" to describe scribing a court's subject-matter jurisdic-

)nstrued emphatic time prescriptions in rules of tion, he maintains that the Rules have the

i of the court. "Jurisdiction," the Court-has aptly same import as provisions governing sub-

See 12 observed, "is a word of many, too many, ject-matter jurisdiction. A litigant gener-

Feder- meanings." Steel Co. v. Citizens for Better ally may raise a court's lack of subject-

pp. 484- Environment 523 U.S. 83, 90, 118 S.Ct. matter jurisdiction at any time in the samecivil action, even initially at the highest

es [the] 1003, 140 L.Ed.2d 210 (1998) (internal quo- appellate instance. Mansfield, C. &e rules tation marks omitted). For example, we L.M.R. Co. v. Swan, 111 U.S. 379, 382, 4hich the have described Federal Rule of Civil Pro- S.Ct. 510, 28 L.Ed. 462 (1884) (challenge to)y Con- cedure 6(b), on time enlargement, and cor- a federal court's subject-matter jurisdic-iacht v. respondingly, Federal Rule of Criminal tion may be made at any stage of the)0 S.Ct. Procedure 45(b), on extending time, as proceedings, and the court should raise therocedur- "mandatory and -jurisdictional." United question sa sponte ); Capron v. the

for the States v. Robinson,- 361 U.S. 220, 228-229, Noorden, 2 Cranch 126, 127, 2 LEd. 229are not 80 S.Ct. 282, 4 L.Ed.2d 259 (1960). But (1804) (judgment loser successfully raised

ie filing see Carlisle v. United States, 517 U.S. 416, lack of diversity jurisdiction for the first

y Rules 419-433, 116 S.Ct. 1460, 134 L.Ed.2d 613 time before the Supreme Court); Fed.ocessing (1996) (holding that, over the prosecutor's Rule Civ. Proc. 12(h)(3) ("Whenever it ap-Lt cases objection, a court may not grant a postver- pears by suggestion of the parties or oth-to adju- diet motion for a judgment of acquittal erwise that the court lacks jurisdiction of

filed one day outside the time limit allowed the subject matter, the court shall dismiss

ground. by Fed. Rule Crim. Proc. 29(c); this Court the action.").' Just so, Kontrick urges, a

gCourt did not characterize the Rule as "jurisdic- debtor may challenge a creditor's objectionffect the tional"); Taylor v. Freeland & Kronz, 503 to discharge as untimely under Rules 4004ec bank- U.S. 638, 642-646, 112 S.Ct. 1644, 118 and 9006(b)(3) any time in the proceedings,e bank L.Ed.2d 280 (1992) (similar ruling regard- even initially on appeal or certiorari. Tr.Arg. 9

foes not ing Fed. Rule Bkrtcy. Proc. 4003(b)). of Oral Arg. 10-11 (a debtor may objectn"') id., "[C]lassify[ing] time prescriptions, even after final judgment or on appeal "so long'or Kon- rigid ones, under the heading 'subject mat- as it's within the same proceeding"); Brief

ter jurisdiction'" can be confounding. for Petitioner 25, and n. 7 (same); Replyas a - Carlisle, 517 U.S., at 434, 116 S.Ct. 1460 Brief 16, and n. 7 (citing lower court deci-

notice of (GINSBURG, J., concurring). Clarity sions supporting Kontrick's argument ongency to would be facilitated if courts and litigants the longevity of time limits stated in RulesS2107(a) used the label "jurisdictional" not for 4004 and 9006(b)(3), e.g., In re Poskanzer,this sec-

udgment, claim-processing rules, but only for pre- 146 B.R. 125, 131 (D.N.J.1992); In reproceed- scriptions delineating the classes of cases Rinde, 276 B.R. 330, 333 (Bkrtcy. Ct. RIf appeals (subject-matter jurisdiction) and the per- 2002); In re Barley, 130 B.R. 66, 69

is filed,ich judg- 9. Even subject-matter jurisdiction, however, U.S. 552, 8 S.Ct. 217, 31 L.Ed. 202 (1887);

may not be attacked collaterally. Des Moines see Restatement (Second) of Judgments § 12Nav. & R. Co. v. Iowa Homestead Co., 123 (1982).

[611


(Bkrtcy. Ct. NJ Ind.1991); In re Kirsch, an affirmative defense to a complaint filed ing65 B.R. 297, 300, 302 (Bkrtcy. Ct. ND outside the Rules 4004(a) and (b) limits.111.1986)). This case involves the third office of the

The equation Kontrick advances over- Rules. conlooks a critical difference between a rule It is uncontested that creditor Ryan cangoverning subject-matter jurisdiction and filed his complaint objecting to debtor casan inflexible claim-processing rule. Char- Kontrick's discharge outside the Rules' enl,acteristically, a court's subject-matter ju- time limits. Kontrick urges that nothing thatrisdiction cannot be expanded to account occurring thereafter counts, for the Rules'for the parties' litigation conduct; a claim- time prescriptions are unalterable, allow- 1processing rule, on the other hand, even if ing no recourse to "equitable exceptions." Konunalterable on a party's application, can Brief for Petitioner 13, n. 4; see id., at 8, of Inonetheless be forfeited if the party as- 16-18. This case, however, involves no wouserting the rule waits too long to raise the issue of equitable tolling or any other equi- que•point. ty-based exception. Neither at the time "wh

creditor Ryan filed the amended complaint Rul(IV containing the family-account claim nor prec

anytime thereafter did he assert circum- Urec[6] We turn back now to the relevant stances--equitable or otherwise-qualify- Unil

claim-processing rules in this case. Bank- ing him for a time extension. Whether the tionruptcy Rules 4004(a) and (b) and Rules, despite their strict limitations, could at 4-9006(b)(3), governing proceedings over be softened on equitable grounds "is ly cwhich bankruptcy courts have subj ect-mat- therefore a question we do not reach.i Fedter jurisdiction,"0 serve three primary pur- See Brief for United States as Amicus U.S.poses. First, they inform the pleader, i.e., Curiae 16 ("[M]uch of [Kontrick's] argu- rulirthe objecting creditor, of the time he has ment is actually directed to an issue that is 4003to file a complaint. Second, they instruct not presented in this case," ie., whether 80 Sthe court on the limits of its discretion to the timing rules here in question are alter- Rulegrant motions for complaint-filing-time enable by recourse to " 'equitable exceptions the :largements. Third, they afford the debtor imported from outside the rules.' ") (quot- feite

of R10. Like Federal Rule of Criminal Procedure grant an untimely motion to extend the time raise

45(b) and Federal Rule of Appellate Proce- to object, even if the creditor lacked notice of wasdure 26(b), Bankruptcy Rule 9006(b) is mod- the bar date); Neeley v. Murchison, 815 F.2deled on Federal Rule of Civil Procedure 6(b). 345, 346-347 (C.A.5 1987) (same). woreSee Advisory Committee's Note accompany- fens(ing Rule 9006 ("Subdivision (b) is patterned 12. Nor should anything in this opinion be afforafter Rule 6(b) F.R.Civ.P. and Rule 26(b) read to suggest that a debtor and creditorF.R.App.P." (emphasis in original)). may stipulate to the assertion of time-barred g

11. Lower courts have divided on the question claims when such an accommodation would 13.whether Bankruptcy Rules 4004 and 4007(c) operate to the detriment of other creditors. thiallow equitable exceptions. Compare, .e~g., See, e.g., In re Dollar, 257 B.R. 364, 366 of295 F.3d, at 733 (Rules 4004 and 4007(c) (Bkrtcy. Ct. SD Ga.2001) ("Although the de- Un"are subject to equitable defenses"); In re fendant debtor would significantly benefit by thoBenedict, 90 F.3d, at 54 (same conclusion the allowance of the amended complaint [re- h

regarding Rule 4007(c)); Farouki v. Emirates flecting the parties' pre-trial agreement to theBank Int'l, Ltd., 14 F.3d 244, 248 (C.A.4 1994) substitute an untimely § 523(a)(6) cause of 'ini(same conclusion regarding Rule 4004), with, action for a timely § 727(a)(2) claim,] the i ofe.g., In re Alton, 837 F.2d 457, 459 (C.A. II defehdant's other creditors would be signifi- U.ýi988) (Rule 4007(c) confers no discketion to cantly harmed."). 50W

U.-


ilaint filed ing Brief for Petitioner 13); Tr. of Oral [7] The Court of Appeals, we agree,(b) limits. Arg. 40 ("Whether [the bankruptcy court] followed the proper path on this key ques-ice of the would have had discretion to allow a late tion. See 295 F.3d, at 734-735. Time

complaint ... isn't before the Court, be- bars, that court noted, generally must beitor Ryan - cause [Ryan has not] claimed that [in this raised in an answer or responsive pleading.to debtor case] there is any equitable groun[d] for See Fed. Rule Civ. Proc. 8(c) (made appli-he Rules' enlarging or extending the deadline, so cable to adversary proceedings in bank-at nothing that question isn't presented."). ruptcy courts by Fed. Rule Bkrtcy. Proc.the Rules' 7008(a))." An answer may be amended toble, allow- We can assume, arguendo, that had include an inadvertently omitted affirma-cceptions." Kontrick timely asserted the untimeliness tive defense, and even after the time to

id., at 8, of Ryan's amended complaint, Kontrick amend "of course" has passed, "leave [toivolves no would have prevailed in the litigation. The amend] shall be freely given when justicether equi- question, in that event, would have been so requires." Fed. Rule Civ. Proc. 15(a);the time "whether the time restrictions in th[e] see Fed. Rule Bkrtcy. Proc. 7015 ("Rule

complaint Rules are in such 'emphatic form'" as to 15 F.R.Civ.P. applies in adversary pro-claim nor preclude equitable exceptions. Brief for ceedings.").rt circum- United States as Amicus Curiae 16 (cita---qualify- tion omitted). See, e.g., Carlisle, 517 U.S., Kontrick not only failed to assert the

hether the at 419-433, 116 S.Ct. 1460 (upholding time- time constraints of Rules 4004(a) and (N).ions, couldan906b3)iaplaigoam deroounds cis ly challenge to one-day-late filing under and 9006(b)(3) in a pleading or amendedot reach."2 Fed. Rule Crim. Proc. 29(c)); Taylor, 503 pleading responsive to Ryan's amendedis Amicus U.S., at 642-646, 112 S.Ct. 1644 (similar complaint. As earlier recounted, see su-

2k's] argu- ruling regarding Fed. Rule Bkrtcy. Proc. pra, at 911-912, Kontsck moved to delete,sue that is 4003(b)); Robinson, 361 U.S., at 222-230, ce

ment. filings, hut, even that far into the., whether 80 S.Ct. 282 (similar ruling regarding Fed. litiin, he eveno t ark the

are alter- Rule Crim. Proc. 45(b)). Here, however, liti to he t amily-ankruptiyexceptions the sole question is whether Kontrick for-

;.' ") (quot- feited his right to assert the untimeliness Ordinarily, under the Bankruptcy Rulesof Ryan's amended complaint by failing to as under the Civil Rules, a defense is lost

nd the time raise the issue until after that complaint if it is not included in the answer or:ed notice of was adjudicated on the merits. 3 In other amended answer. See Fed. Rule Bkrtcy.n, 815 F2d words, how long did the affirmative de- Proc. 7012(b) ("Rule 12(b)-(h) F.R.Civ.P.

fense Rules 4004(a) and (b) and 9006(b)(3) applies in adversary proceedings."); 5A C.opinion be afforded Kontrick linger in the proceed- Wright & A. Miller, Federal Practice and

ind creditor ings? Procedure § 1347, p. 184 (2d ed. 1990)time-barred

lation wouldScredtiors, w13. As the Government notes, "[t]he issue in (1938))." Brief for United States as Amicus

r. 364t, 366this case is more accurately described as one Curiae 7, n. 5 (some internal quotation marksof forfeiture rather than waiver." Brief for omitted).

)ugh the de- United States as Amicus Curiae 7, n. 5. Al-ly benefit by though jurists often use the words inter-)mplaint [re- changeably, "forfeiture is the failure to make

greement to the timely assertion of a right[;] waiver is the provides that "[a] proceeding commenced by

ý6) cause of 'intentional relinquishment or abandonment a complaint objecting to discharge is gov-

claim,] the of a known right.' United States v. Olano, 507 erned by Part VII of these rules." Part VII

d be signift- U.S. 725, 733, 113 S.Ct. 1770, 123 L.Ed.2d includes Bankruptcy Rule 7008(a), which508 (1993) (quoting Johnson v. Zerbst, 304 states that "Rule 8 F.R.Civ.P. applies in ad-U.S. 458, 464, 58 S.Ct. 1019, 82 L.Ed. 1461 versary proceedings."

[631

918 124 SUPREME COURT REPORTER 924

("A defense or objection that is not raised reasonable construction of complaint-pro-

by motion or in the responsive pleading is cessing rules, in sum, would allow a liti-

waived unless it is protected by Rules gant situated as Kontrick is to defeat a

12(h)(2) or 12(h)(3) or by the successful claim, as filed too late, after the party has

invocation of the liberal amendment policy litigated and lost the case on the merits.

of Rule 15."). Rules 12(h)(2) and (3) pro-long the life of certain defenses, but time

prescriptions are not among those provi- For the reasons stated, the judgment of

sions. Even if a defense based on Bank- the United States Court of Appeals for theruptcy Rule 4004 could be equated to "fail- Seventh Circuit is

ure to state a claim upon which relief can

be granted," the issue could be raised, Affirmed.

the latest, "at the trial on the merits."

Fed. Rule Civ. Proc. 12(h)(2). Only lack of

subject-matter jurisdiction is preserved

post-trial. Fed. Rule Civ. Proc. 12(h)(3).

And, as we earlier explained, see supra, at

914-916, Kontrick's resistance to the fami-

ly-account claim is not of that order. No

[641

Ms. Ketchum will provide an oral report on the revision of the forms page

on the Judiciary's Internet website and on the JNET.

IA'

N)

1.4

Ia

Form B6G (DRAFT)In re Case No.

Debtor (If known)

SCHEDULE G- EXECUTORY CONTRACTS AND UNEXPIRED LEASES

Describe all executory contracts of any nature and all unexpired leases of real or personal property. Include any time share interests.If all leases and contracts will not fit on this page, use continuation sheets in a similar format.

Provide the names and complete mailing addresses of all other parties to each lease or contract described, using the same format as inSchedules D, E, and F. Use as many name and address boxes as necessary to list each party to any lease or contract and separate eachlease or contract scheduled. State the nature of debtor's interest in each contract, i.e., "Purchaser," "Agent," etc. State whether debtor isthe lessor or lessee of a lease.

[] Check this box if debtor has no executory contracts or unexpired leases to report on this Schedule G.

NAME AND MAILING ADDRESS, DESCRIPTION OF CONTRACT OR LEASE AND NATURE OF DEBTOR'S INTEREST. STATEINCLUDING ZIP CODE, OF EACH OTHER WHETHER LEASE IS FOR NONRESIDENTIAL REAL PROPERTY. STATE CONTRACTPARTY TO LEASE OR CONTRACT NUMBER OF ANY GOVERNMENT CONTRACT

---------------------------------------------------------------------------------------------------------------

-------------------------- -----------------------------------------------------------------------------------------------------------

-------------------------- ------------------------------------------------------------------------------------------------------------

-------------------------- ------------------------------------------------------------------------------------------------------------

COMMITTEE NOTE

The form is amended to implement an amendment to Rule 1007 by deleting the instruction thatparties to these contracts and leases will not receive notice of the bankruptcy case unless they arelisted on one of the schedules of liabilities. Even though a contract or lease may be an asset of thedebtor or the debtor may be current on any lease or contract payment obligations, other parties tothese transactions may have an interest in the bankruptcy case and should receive notice.

I

U•A

Effective Dates of Proposed Bankruptcy Rules Amendments

December 1, 2004

101120020)9014

December 1, 2005

100730043005400870049006

Official Form 6 - Schedule G

December 1, 2006

50059036

BANKRUPTCY RULES SUGGESTIONS DOCKET(By Rule Number)


The docket sets forth suggested changes to the Federal Rules of Bankruptcy Procedure considered by the

Advisory Committee since 1997. The suggestions are set forth in order by: (1) bankruptcy rule number, (2) form number,

and where there is no rule or form number (or several rules or forms are affected), (3) alphabetically by subject matter.

Suggestion Docket No., Source & Date Status

ANK*UPTC-Y RULE

Rule 2002(g) 02-BK-A 2/02 - Referred to chair and reporter

Allow entity to designate address Bankruptcy Clerk Joseph P. 3/02 - Committee considered

for purpose of receiving notices. Hurley, for the BK Noticing 4/03 - Committee considered

Working Group 9/03 - Committee considered and

2/4/02 approved in principle

00-BK-A PENDING FURTHER ACTION

Raymond P. Bell, Esq.,

Fleet Credit Card Services,L.P.1/18/00

Rule 2003 03-BK-D 8/03 - Sent to chair and reporter

Clarify debtor's obligation to Lawrence A. Friedman 9/03 - Committee considered and

provide substantiating documents 8/1/03 referred to ConsumerSubcommittee

1/04 - Consumer Subcommitteeconsidered at focus groupmeeting

PENDING FURTHER ACTION

Rule 2016 03-BK-D 8/03 - Sent to chair and reporter

Require debtor's attorney to Lawrence A. Friedman 9/03 - Committee considered and

disclose details of professional 8/1/03 referred to Consumer

relationship with debtor Subcommittee1/04 - Consumer Subcommittee

considered at focus groupmeeting


Advisory Committee on Bankruptcy Rules

March 9, 2004

Rule 3002(c) 01-BK-F 6/00 - Referred to chair, reporter, andProvide exception for Chapters 7 Judge Paul Mannes committeeand 13 corporate cases where 6/23/00debtor not an individual. PENDING FURTHER ACTION

Rule 3017.1 00-BK-013 2/01 - Referred to chair and reporterEliminate rule extension number. 01-BK-C

Patricia Meravi PENDING FURTHER ACTION1/22/01

Rule 4002 03-BK-D 8/03 - Sent to chair and reporterClarify debtor's obligation to Lawrence A. Friedman 9/03 - Committee considered andprovide substantiating documents 8/1/03 referred to Consumer

Subcommittee1/04 - Consumer Subcommittee

considered at focus groupmeeting


Rule 4003 01-BK-D 4/01 - Referred to chair and reporterImpose burden of proof upon the Judge Barry Russell 3/02 - Committee considered anddebtor. 4/4/01 deferred decision

9/03 - Committee considered and tookno action but continues tomonitor case law


Rule 4003(b) 04-BK-B 3/04 - Sent to chair and reporterAllow retroactive extension of Judge Eugene R. Wedoffdeadline, and provide that secured 2/17/04 PENDING FURTHER ACTIONcreditors may object to exemptionclaim.

Advisory Committee on Bankruptcy RulesMarch 9, 2004 2

Rule 4004 03-BK-D 8/03 - Sent to chair and reporterDispense with requirement of Lawrence A. Friedmanfiling adversarial complaint in 8/1/03 PENDING FURTHER ACTIONcertain circumstances

Rule 4008 01-BK-E 1/02 - Referred to chair and reporterProvide a deadline for filing Francis F. Szczebak, Esq., for 3/02 - Committee considered andreaffirmation agreement. the BK Judges Advisory deferred decision. Referred to

Group subcommittee.11/30/01 10/02 - Committee approved for

publication1/03 - Standing Committee approved

for publication8/03 - Published for public comment


Rule 5005(c) 03-BK-B 7/03 - Referred to chair and reporterAdd Clerk of the Bankruptcy Judge Robert J. Kressel 9/03 - Committee considered andAppellate Panel to entities already 7/2/03 approved for publicationlisted. 1/04 - Standing Committee approved

for publication


Rule 6007(a) 99-BK-I 12/99 - Referred to chair, reporter, andRequire the trustee to give notice Physa Griffith South, Esq. committeeof specific property he intends to 10/13/99abandon. PENDING FURTHER ACTION

Rule 7001 03-BK-D 8/03 - Sent to chair and reporterDispense with requirement of Lawrence A. Friedman 9/03 - Committee considered andfiling adversarial complaint in 8/1/03 referred to Consumercertain circumstances Subcommittee

1/04 - Consumer Subcommitteeconsidered at focus groupmeeting



Rule 7023.1 00-BK-013 2/01 - Referred to chair and reporterEliminate rule extension number. 01-BK-C

Patricia Meravi PENDING FURTHER ACTION1/22/01

Rule 7026 00-BK-008 2/01 - Referred to chair and reporter.Eliminate mandatory disclosure 01-BK-Aof information in adversary Jay L. Welford, Esq.and Judith PENDING FURTHER ACTIONproceedings. G. Miller, Esq., for the

Commercial Law League ofAmerica1/26/01

00-BK-00901-BK-BJudy B. Calton, Esq.1/12/01

Rule 9011 97-BK-D 6/97 - Referred to chair, reporter, andMake grammatical correction. John J. Dilenschneider, Esq. committee

5/30/97PENDING FURTHER ACTION

Rule 9014 02-BK-E 5/02 - Referred to chair and reporterAllow local districts the option of Thomas J. Yerbich, Esq. 8/02 - Draft excepting provisionsamending rule. 2/22/02 of Civil Rule 26 in contested

matters published for comment4/03 - Committee approved6/03 - Standing Committee approved for

publication8/03 - Published for public comment


Rule 9036 02-BK-A 2/02 - Referred to reporter, chairState that notice by electronic Bankruptcy Clerk Joseph P. and committeemeans is complete upon Hurley, for the BK Noticing 9/03 - Committee considered andtransmission. Working Group approved in principle

2/1/02 1/04 - Standing Committee approvedfor publication



ANKRUPTCY FOOfficial Form 1 02-BK-D 2/02 - Referred to reporter, chair, andAmend Exhibit C to the Gregory B. Jones, Esq. committeeVoluntary Petition. 2/7/02


Schedule I 03-BK-D 8/03 - Sent to chair and reporterAmend to make applicable in Lawrence A. Friedman 9/03 - Committee considered andChapter 7 and 11 proceedings 8/1/03 approved for publication


Official Form 9 97-BK-B 3/97 - Referred to reporter, chair, andDirect that information regarding US Trustee Marcy J.K. Tiffany committeebankruptcy fraud and abuse be 3/6/97sent to the United States trustee. PENDING FURTHER ACTION

Official Form B9C 00-BK-E 5/00 - Referred to reporter, chair, andProvide less confusing notice of Ali Elahinejad committeecommencement of bankruptcy 2/23/00form to debtors and creditors. PENDING FURTHER ACTION

Official Form B10 04-BK-A 3/04 - Referred to reporter, chair, andAmend Proof of Claim form. Glen K. Palman Subcommittee on Forms

2/19/04PENDING FURTHER ACTION

SUBJECT MATTEFraud 02-BK-B 2/02 - Referred to chair and reporterAmend the rules to protect Dr. & Mrs. Glen Dupreecreditors from fraudulent 2/4/02 PENDING FURTHER ACTIONbankruptcy claims and themishandling of cases by trustees.

New Rule 03-BK-F 10/03 - Referred to reporter and chairIncorporate proposed Civil Rule Judge Geraldine Mund5.1 in the bankruptcy rules. 10/14/03 PENDING FURTHER ACTION


Small Claims Procedure 00-BK-D 5/00 - Referred to reporter, chair, andEstablish a "small claims" Judge Paul Mannes committeeprocedure. 3/13/00

(see also 98-BK-A) PENDING FURTHER ACTION

Social Security Number 03-BK-E 10/03 - Referred to reporter and chairAllow credit reporting agencies to Experian (Janet Slane,have access to debtor's full social Director, Product PENDING FURTHER ACTIONsecurity number. Infrastructure)

10/07/03

Advisory Committee on Bankruptcy Rules

March 9, 2004 6

The next meeting of the Committee will take place

September 9 - 10, 2004at

Ritz-Carlton Hotel, Half Moon Bay, CA

The Committee will discuss dates and locations forthe Spring 2005 meeting.